EUR/JPY Price Analysis: Rebounds from 12-day low to defend 142.00 on BOJ’s status-quo
- EUR/JPY refreshed multi-day low before bouncing off 141.14 on BOJ’s inaction.
- BOJ kept monetary policy unchanged while meeting market expectations.
- Two-week-old support line restricts immediate downside but 100-SMA tests buyers.
- RSI rebound hints at the further recovery of the pair, falling wedge eyed too.
EUR/JPY picks up bids to attack 100-SMA around 142.25, following a whipsaw that refreshed the intraday bottom after the Bank of Japan’s (BOJ) monetary policy announcements on early Thursday. In doing so, the cross-currency pair rebounds from a fortnight-old support line.
BOJ kept the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields toward zero, as expected, during September’s monetary policy. The Japanese central bank also concluded its pandemic relief stimulus as said, “BOJ decided to phase out pandemic funding program, shift to fund provision step that meets a wide range of financing needs.”
Given the RSI’s rebound from the oversold territory supporting the quote’s latest bounce off the short-term support line, the EUR/JPY is likely to overcome the immediate 100-SMA hurdle near 142.30.
However, the quote’s further upside hinges on the successful break of a downward sloping resistance line from September 12, around 143.60 at the latest.
That said, a clear upside break of the 143.60 hurdle will confirm the falling wedge bullish chart pattern, which in turn suggests the EUR/JPY rally towards 148.00 on a theoretical basis.
Meanwhile, a downside break of the nearly support line, also forming part of the wedge, close to 141.75, will quickly fetch the quote towards the 200-SMA support near 139.70.
EUR/JPY: Four-hour chart
Trend: Further recovery expected