Chart of the week – Potential upside breakout for EUR/JPY

VSheart of the week – EUR/JPY

Potential breakout of EUR/JPY

Short term technical analysis

Timestamp: April 10, 2022 at 4:00 p.m. (click to enlarge the graphic)

Source: CMC Markets & TradingView

  • The ECB will make its final monetary policy decision this Thursday, April 14, but no changes are expected pending further developments in the Ukraine-Russia conflict and the results of the French presidential elections despite the current record level of inflation in the Eurozone area.
  • From its high of 137.50 on March 28, 2022, EUR/JPY has started to consolidate in a potential minor range setup of “bullish flag” over the past couple of weeks, implying that the next potential move EUR/JPY is likely a continuation of its medium-term impulsive bullish streak in place since the March 7, 2022 low of 124.40 if price actions manage to stage a break above the upper bound. 135.60 from the “bullish flag”.
  • The 4-hour RSI oscillator managed to stay above a key corresponding support level at 39%.
  • Watch 132.90 medium term pivot support and a break above 135.60 is likely to see another potential upside to retest 137.50 before next resistance at 139.50. (the major June 2015 swing zone and a group of Fibonacci extension levels).
  • On the other hand, a 4-hour close below 132.90 invalidates the bullish scenario of a multi-week corrective decline towards the next support at 129.40 (61.8% Fibonacci retracement of the upside move from the March 7, 2022 to the March 28, 2022 high).

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