The EURJPY currency pair gained ground after traders rejected the 139.00 price level on Friday, with a 1.81% surge. The Euro was boosted by a surge in risk appetite following the banking sector’s rescue operations, which prevented total collapse within the industry.
Traders will be glued to critical economic data from Germany, the Euro Area, and the U.S. The main events include German and Euro Area Inflation, including the PCE Index, which the Federal Reserve favours as an inflation tracker.
The EURJPY is currently in a broader downtrend, represented by the descending channel pattern and price breaking below the 100-day moving average. Support and resistance were established at the 139.520 and 143.233 levels, respectively.
Following a rejection of support, bullish traders swept into the market. Price action is moving higher, with the 143.233 level most likely earmarked as a level of interest for a bull case.
Bears will be standing on the sidelines as bullish traders overrun the market. If price action approaches the upside on declining volumes, bears will likely look to the 143.233 level as the best price to sell. The 139.520 level will likely be of interest in a bear case.
According to the Bundesbank president, Joachim Nagel, the European Central Bank (ECB) is determined to continue fighting inflation. The ECB’s hostility towards inflation can be a leading indicator of further rate hikes. The EURJPY will likely find less friction towards the upside, making the 143.233 level probable.
Sources: Bloomberg, TradingView