• EUR/JPY snapped four days of gains on Thursday, losing 0.18%.
• A risk-off impulse bolstered the appetite for safe-haven, so the yen rose.
• Negative divergence in the 4-hour chart opens the door for a EUR/JPY pullback towards 138.00.

EUR/JPY refreshes a five-week high, for the fifth consecutive trading day, at around 139.99, but erased some gains as risk appetite decreased on China’s recession fears, alongside a tranche of positive US economic data that increased the odds of a 75 bps Fed rate hike. At the time of writing, the EUR/JPY is trading at 139.40 as the Asian Pacific session begins.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY daily chart portrays buyers’ failure to conquer the 140.00 mark. The cross-currency retreated towards the 50-day EMA at 138.83, a place sought by longs, which lifted the pair back above the 139.00 figure. Therefore, the EUR/JPY bias, from a daily scale perspective, is bullish.

Short term, the EUR/JPY is trending up on the four-hour scale. Still, the Relative Strength Index (RSI), shows buyers’ exhaustion, with the oscillator registering successive series of lower highs, contrarily to price action, printing higher highs. Hence, negative divergence on this time frame might deter EUR bulls from opening fresh longs positions ahead of a likely pullback toward lower prices.

Therefore, the EUR/JPY first support would be the S1 daily pivot at 138.92. Once cleared, the following support levels would be the S2 daily pivot point at 138.38, followed by the 200-EMA at 137.64.

EUR/JPY Key Technical Levels