• EUR/JPY recorded a fresh weekly high each day of the week.
• The shared currency strengthened once it broke above the 139.00 mark on the high EU inflation data.
• EUR/JPY and RSI’s negative divergence in the 4-hour chart suggests the pair might pull back before testing 140.00.

The EUR/JPY extends its weekly gains for the fourth consecutive day, up almost 0.50% during the day as the New York session is about to end. At the time of writing, the EUR/JPY is trading at 139.60, refreshing five-week highs, for the fourth straight day.

EUR/JPY Price Analysis: Technical outlook

After consolidating around the 138.20-139.20 area, the cross-currency resumed its up trend. Data from the euro area, showing inflation around 9.1% YoY, caused a jump in the pair, clearing the 139.00 figure and hitting a fresh weekly high of 139.68.

Hence, the EUR/JPY path of least resistance is upwards. So, the EUR/JPY first resistance would be the 140.00 figure. A decisive break would pave the way toward July 21 cycle high at 142.32.

The EUR/JPY 4-hour chart illustrates the pair clearing the July 27 high at 139.50, further cementing the case for a 140.00 test. Nevertheless, the Relative Strength Index (RSI) shows signs of exhaustion, as the EUR/JPY reaches a fresh higher high, while the RSI’s peak is lower than the previous impulse to the upside. Therefore, a negative divergence could be forming, meaning that the EUR/JPY might drop soon before resuming the uptrend.

The EUR/JPY’s first resistance would be the 140.07 July 25 high. Once cleared, the next resistance would be the July 22 daily high at 141.09, followed by the YTD high at 142.35.

EUR/JPY Key Technical Levels