EUR/JPY Price Analysis: Correction towards 20-EMA at 141.00 looks certain

• The formation of selling tails at elevated levels has shifted the cross into a correction mode.
• The 20-EMA at 141.00 will act as a major cushion for the asset.
• Oscillation in a bullish range of 60.00-80.00 by the RSI (14) indicates that the upside bias is intact.

The EUR/JPY pair is facing barricades around 143.00 in the Tokyo session after a modest incline from 142.30. On Wednesday, the asset witnessed a steep fall after failing to sustain above the critical resistance of 144.23 despite making multiple attempts. Investors started pouring funds into the Japanese yen on expectation of an intervention in the Fx moves by the Bank of Japan (BOJ).

On a daily scale, the cross has slipped back below the critical resistance of 144.23 plotted horizontally from June 8. The attempts to establish above the aforementioned hurdle are visible. However, the formation of selling tails consecutively this week is indicating that the shared currency bulls have to wait for more for shifting into unchartered territory.

A failure in sustaining above the critical resistance has resulted in a correction, which will conclude after hitting the 20-period Exponential Moving Average (EMA) at 141.00.

Meanwhile, the Relative Strength Index (RSI) (14) is comfortably oscillating in a bullish range of 60.00-80.0, which indicates that an upside bias is intact.

A correction towards the 20-EMA at 141.00 will create a bargain buy for the market participants which will send the cross towards June 8 high at 144.23, followed by Monday’s high at 145.63.

Alternatively, a drop below August 31 low at 138.27 will drag the asset towards August 24 low 135.51 and August 2 low at 133.39.

EUR/JPY daily chart