EUR/JPY Price Analysis: Pair Approaches 141.50 After BoJ Announcement

• EUR/JPY has staged a move north on BoJ policy maintenance.
• The Bank of Japan has kept the interest rate unchanged at -0.1% and the 10-year JGB target around 0%.
• The cross has broken above the 200 period EMA at 140.00 in one go and is expected to go higher.

The USD/JPY has shot up as the Bank of Japan has kept its monetary policy unchanged. The pair it is up about 285 pips until reaching new six-day highs at 141.39. At time of writing, the euro is trading against the yen at about 141.12, gaining 1.98% on the day.

The BoJ has kept the interest rate unchanged at -0.1% and the 10-year Japanese Government Bond (JGB) target around 0%.

Investors are waiting for signs of an abandonment of the ultra-easy monetary policy applied for a decade. However, the maintenance of monetary policy has weakened the Japanese yen.

On the hourly basis, EUR/JPY has rallied sharply after forming a triple bottom chart pattern. The formation of said chart pattern around 138.00 is proving a straight up bullish reversal. The cross has broken above the 200 period EMA at 140.00 in one go and is expected to extend gains further given the momentum in the move north.

The Relative Strength Index (RSI) (14) has entered the 60.00-80.00 bullish range aggressively, signaling more upside ahead.

After a rally, a minor corrective move near the Jan 5 low at 139.97 will be a good buying opportunity for market participants, driving the asset towards the Jan 6 high at 141.45 followed by the Jan 28 high. December around 143.00.

On the other hand, a move below the previous week’s low at 138.00 will drag the cross towards the January 3 low at 137.39. A slide below this last level will trigger a move lower which would expose the asset to further decline towards the April 14 low at 135.51.

EUR/JPY Hourly chart