Chart of the week – EUR/JPY
Potential bullish breakout for EUR/JPY
Short-term technical analysis
Source: CMC Markets & TradingView
- The ECB will deliver its latest monetary policy decision on this Thursday, 14 April but no changes are expected as officials wait for further developments in Ukraine-Russia conflict and the outcome of the French presidential election results despite the current record high level of inflation in the Eurozone area.
- Since its 28 March 2022 swing high of 137.50, the EUR/JPY has started to consolidate into a potential minor “bullish flag” range configuration in the last two weeks which implies that the potential next move of the EUR/JPY is likely a continuation of its medium-term impulsive up sequence in place since 7 March 2022 low of 124.40 if price actions manage to stage a breakout above the 135.60 upper boundary of the “bullish flag”.
- The 4-hour RSI oscillator has managed to remain above a key corresponding support level at 39%.
- Watch the 132.90 key medium-term pivotal support and a break above 135.60 is likely to see another potential upleg to retest 137.50 before the next resistance at 139.50 (the major swing high area of June 2015 & a cluster of Fibonacci extension levels).
- On the other hand, a 4-hour close below 132.90 invalidates the bullish scenario for a multi-week corrective decline towards the next support at 129.40 (61.8% Fibonacci retracement of the up move from 7 March 2022 low to 28 March 2022 high).
