The price movement on the EUR/JPY currency pair chart is seen again displaying a continuous bullish pattern in early trading this week.
Last week, the price showed a decline before the price increase was seen over the weekend before closing the trading curtain of the week.
Risky market sentiment failed to support the strengthening of the Japanese Yen as a safe-haven currency in resumed trading earlier this week.
Investors were also wary of Yen trading ahead of Japan’s central bank policy meeting this weekend with the expectation that loose policy would continue to be maintained.
Meanwhile, investors are beginning to see the potential for the Euro with the expectation that the European central bank (ECB) will discuss measures to reduce bond purchases (tapering) at the September meeting.
Even on the change in the European inflation target set by the ECB last week, ECB President Christine Lagarde had signaled for a policy change at the July edition meeting.
Thus, analysts see there is support for the Euro strengthening slightly this week although the development of Covid-19 infection in Europe remains worrisome.
The price on the EUR/JPY chart is seen retesting the resistance level at 131.00 since yesterday with the movement above the Moving Average 50 (MA50) support level on the 1 hour time frame signaling for a bullish trend of the price.
Higher rises will be expected to test the zone around 131.500 first before continuing the climb towards the resistance zone at 132.500.
If the opposite happens, the bearish situation is seen to test the 1.3000 support level that the price hit last week.
A lower decline will push the price to fall below the 129.00 level to maintain the previous bearish trend again.
