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EUR/JPY Price Holds modest gains above 185.50, bullish bias remains intact
- EUR/JPY trades with mild gains near 185.65 in Thursday’s early European session.
- The cross keep a modest bullish bias above the key 100-day SMA.
- The first upside barrier emerges at 186.00; the initial support level is seen at 185.15.
The EUR/JPY cross posts modest gains around 185.65 during the early European session on Thursday. The potential upside might be limited for the cross amid fears of foreign exchange intervention from Japanese authorities.
Japan’s Finance Minister Satsuki Katayama said on Wednesday that officials are standing ready to respond appropriately on foreign exchange if required. Katayama added that she aligns with the Bank of Japan (BoJ) governor on several matters.
On the other hand, the hawkish stance of the European Central Bank might help limit the EUR’s losses. The ECB is likely to raise its deposit rate to 2.25% at its upcoming June policy meeting, with another increase likely in September, a Reuters poll of economists showed.
Technical Analysis:
In the daily chart, EUR/JPY trades at 185.64, holding a modest bullish bias as it consolidates above the Bollinger middle band around 185.15 and the 100-day simple moving average (SMA) near 184.48. The pair is trading closer to the upper half of its recent Bollinger envelope, with the upper band near 186.02 acting as immediate overhead resistance, while the Relative Strength Index (14) around 55 suggests steady but not overstretched upside momentum.
On the topside, a daily close above the Bollinger upper band at 186.02 would open the way for a continuation of the advance toward higher highs in the coming sessions. On the downside, initial support is seen at the Bollinger middle band near 185.15, followed by the 100-day SMA at 184.48 and the lower Bollinger band around 184.28, where buyers would be expected to re-emerge if the current pullback deepens.
