• The euro recovered some ground vs. the Japanese yen amidst the scenario of Japanese authorities intervening in the FX markets.
• EUR/JPY Price Analysis: The bounce at weekly lows might open the door for a re-test of 142.00.

The EUR/JPY is paring some of Thursday’s losses as the Asian session begins and is posting decent gains of 0.22%. At the time of writing, the EUR/JPY is trading at 139.62.

The market mood remains negative. On Wednesday afternoon, the US Federal Reserve hiked rates by 0.75%, opening the door for further hikes. Also, the Bank of England (BoE) and the Swiss National Bank (SNB) followed suit, hiking 0.25% and 0.50%, respectively. That, alongside dismal US housing data, reignited recession fears on the traders’ minds.

Reflecting the abovementioned were US equities tumbling between 3 and 5 percent. Asian futures are trading in the red, meaning bourses get ready for a lower open.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY daily chart illustrates the pair as upward biased. Even though Thursday’s price action recorded a fresh weekly low at around 137.84, the pair bounced off weekly lows and settled around the 139.40-60 area.

The EUR/JPY’s 4-hour chart illustrates that the pair broke below the bullish flag and aimed lower towards 137.84 weekly lows, at around the 200-4H simple moving average (SMA). Nevertheless, the EUR/JPY surged towards the 100-4H SMA at around 139.62, a difficult dynamic resistance level, on its way towards a re-test of June 12 highs at around 141.73.

Hence, the EUR/JPY is upward biased. That said, the EUR/JPY’s first resistance would be June 16 high at 139.95. Break above would expose the R1 daily pivot at 140.74. Once cleared, the EUR/JPY’s next resistance would be 50-4H SMA at 141.33, followed by the aforementioned June 12 high.

Key Technical Levels