EUR/JPY Loses Momentum Amid Speculation of BoJ Intervention

During the early European trading hours on Tuesday, the EUR/JPY cross experienced a loss of momentum, hovering near 162.75. Growing speculation surrounding potential intervention by the Bank of Japan (BoJ) in the foreign exchange market has bolstered the Japanese Yen (JPY) in the near term. Japanese Finance Minister Shunichi Suzuki’s remarks, emphasizing readiness to respond to disorderly FX moves and monitor exchange rate fluctuations with a high sense of urgency, have contributed to this sentiment.

From a technical standpoint, the bearish outlook for EUR/JPY remains intact, with the cross trading below the 50- and 100-period Exponential Moving Averages (EMA) on the four-hour chart. The Relative Strength Index (RSI) hovering in bearish territory around 36.40 further supports sellers in the current scenario.

On the upside, the first significant barrier for EUR/JPY lies near the 100-period EMA at 163.15, followed by the 50-period EMA at 163.32. A decisive breakthrough above the latter could expose the upper boundary of the Bollinger Band at 163.58. Further upward momentum beyond this level may sustain a bullish move towards the March 27 high at 164.41.

Conversely, the lower limit of the Bollinger Band at 162.65 serves as an initial support level for the cross. The key support level is situated at the psychological mark of 162.00, coinciding with the low of March 19. A breach below 162.00 could trigger a decline towards the March 14 low at 161.10.

As traders monitor developments in the forex market and anticipate potential intervention by the BoJ, the EUR/JPY cross is likely to experience further volatility in the near term, with key levels guiding its trajectory.

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