At the beginning of Friday’s European trading business hours, the EUR/JPY pair was trading close to 177.45, having risen for the fourth consecutive day. The Yen is still weak against the Euro because Japanese core inflation increased slightly in September, the first increase since May. News broke just before the Bank of Japan’s meeting the following week. There is a broad consensus that the BoJ will keep interest rates where they are, and an increasing number of analysts predict that any possible hikes will be postponed until December or even into the following year.
However, EUR/JPY looks promising from the technical indicators’ point of view. It’s holding firm over the 100-day EMA (exponential moving average), which is a significant support indicator. Moreover, the RSI (Relative Strength Index) at roughly 65.90 indicates upward movement may continue; there’s potential for more increases.
At present, price faces a difficulty to gain momentum around 177.86—that was the peak on October 8th. The EUR/JPY exchange rate is expected to rise to 178.70, where the Bollinger Bands peak, if it maintains its strength. Beyond that, 179.00 looms as a key point to watch.
Initial support on the downside can be found at the October 21 low, 175.35. If that gives way, things might slide to 173.70 (September 22nd’s bottom), then potentially down to 172.50
