The EURJPY currency pair has gained 1.43% as the market recovers losses incurred during the Asian Session. The Euro lost ground to the Yen as the banking sector’s fears continued to haunt the market, especially in Europe, causing a risk-off sentiment.
The driving forces of the market this week will be the U.S. Interest Rate Decision and the banking sector’s ongoing developments. Traders will likely walk on eggshells as they try to determine where the value lies in a market full of uncertainty.
The EURJPY currency pair is in a firm downtrend, trading below its 100-day moving average. However, the pair has consolidated sideways in a rectangle pattern with support and resistance located at the 139.520 and 142.239 levels, respectively.
With the price currently moving higher, bulls are likely eyeing the 142.239 resistance level as a take-profit level. If a high volume breakout above the pattern occurs, the pair will probably be levelled up to the 144.962 level.
Alternatively, if bearish traders outdo bulls at present, the pair will likely be lowered toward support at the 139.520 level. A breakout below the support on high volume could validate further price action to the downside. Bears will probably look to the 137.975 level with interest if the pair is dragged lower.
The market will be anticipating the U.S. Interest Rate Decision due on Wednesday. Traders will determine their appetite for risk assets upon the rates decision and events unfolding in the banking sector. If a rate hike is implemented, risk assets will likely face downside momentum as higher-yielding safe-haven assets find favour.
Sources: Reuters, TradingView