As Eurozone Core Inflation Appears Persistent, EUR/JPY Price Analysis: Aims To Climb Above 141.00

During the Tokyo session, the EUR/JPY pair is meeting resistance close to 141.00. As the European Central Bank (ECB) prepares for additional rate hikes in the near future, the cross is struggling to extend its recovery above the aforementioned resistance. However, the upside seems probable.

Isabel Schnabel, a member of the ECB's Executive Board, stated that nominal inflation has begun to fall while fundamental inflation persists. To achieve the intended level of inflation, the ECB would require immense fortitude; consequently, additional rate hikes cannot be ruled out.

The significance of Bank of Japan (BoJ) Governor Kazuo Ueda's speech on Tuesday will be significant for the Japanese Yen. This will shed light on the likely path of monetary policy action.

The EUR/JPY currency pair has rebounded firmly from the horizontal support formed by the Bearish Megaphone pattern on the two-hour time frame. The horizontal support of the chart pattern is the March 16 low of 139.13, while the upward trendline is drawn at 141.58. After the breakdown of critical support, a bearish megaphone pattern is usually accompanied by extreme vulnerability.

The 50-period Exponential Moving Average (EMA) at 141.00 represents a point of resistance for Eurozone investors.

The Relative Strength Index (14) has shifted from the bearish range of 20.00-40.00 to the bullish range of 40.00-60.00, indicating a temporary reversal.

Should the asset surpass the March 21 peak of 142.79, Euro bulls would drive the cross toward the March 9 low around 144.00 and then the March 15 peak of 145.00.

In contrast, a break below the low of 139.13 on March 16 would send the cross toward the low of 138.00 on January 19. A decline below this level would expose the asset to a 26 September 2022 low of approximately 137.36.