• A risk-off impulse kept the EUR/JPY from reaching a fresh YTD high at around the 146.00 psychological figure.
• EUR/JPY’s failure to re-test the 145.63 sent the pair tumbling below the 145.00 mark.
• Short term, the EUR/JPY might be headed downwards, but upside risks remain once the pair clears 145.00.

The EUR/JPY opens Wednesday’s Asian Pacific session with decent gains of 0.24%, after Tuesday’s 0.34% loss, courtesy of a risk-off impulse when data from the US flashed inflation decelerating less than estimates, fueling possibilities for a US Fed 75 bps rate hike. At the time of writing, the EUR/JPY is trading at 144.41.

EUR/JPY Price Analysis: Technical outlook

On Tuesday, the EUR/JPY rallied towards the new YTD high reached on Monday at 145.63 but fell short and dived below the 145.00 figure. That, alongside a minimal negative divergence between the EUR/JPY price action and the RSI, could open the door for a fall towards the September 12 daily low at 143.37, ahead of the 143.00 figure.

Short term, the EUR/JPY is neutral-to-downward biased. Even though a negative divergence emerged, EUR/JPY consolidated in the 144.15-145.00 range, with the 20-EMA at 144.15, being the first demand zone, which, once cleared, would pave the way for further losses.

If the above scenario plays out, the EUR/JPY’s next support would be the confluence of the 50-EMA and the daily pivot at around 142.14/19. Break below will expose the 100-EMA at 139.98, ahead of the S1 daily pivot at 139.67.

On the other hand, if the EUR/JPY clears the September 13 high at 145.37, a YTD high re-test is on the cards.

EUR/JPY Key Technical Levels