The price movement on the chart of the EUR/JPY currency pair on Wednesday was among those that stole the attention of investors yesterday when it recorded a decline to the latest 5 -week low.
The previously traded weak Yen is likely to get a re-strengthening injection from increasingly risky market sentiment factors which give it an advantage over safe-haven currencies such as the US dollar.
Meanwhile, the Euro continued to depreciate sharply this week driven by concerns of a European economic downturn following the risk of the energy industry being affected by the continuation of the crisis with Russia.
Still, analysts see an opportunity for the Euro to rebound if investors' focus begins to shift to monetary policy tightening measures to be implemented by the European Central Bank (ECB) at its July meeting.
Monitoring the movement on the EUR/JPY chart this week, the price has made a drastic decline last Tuesday after the previously displayed rise reached the level around 142.300.
Yet the price has plunged past the 140.00 focus zone and resumed further lower declines in Wednesday’s trading yesterday.
The decline in the European session yesterday has managed to hit the level of 137,500 for the latest record low of 5 weeks before the price slightly rose again in the New York session trading.
Continuing into today's trading (Thursday), the rise is seen to continue until the beginning of the European session but at a slower pace.
The Moving Average 50 (MA50) barrier level on the 1 hour time frame will be tested for the price to give an indication for the next movement extension.
If the price manages to pass the MA50 barrier, it is likely that the rise can continue to move to the 140.00 zone which is seen to form a new SBR (support become resistance) zone.
On the other hand if the price returns to show signs of continuing the previous bearish pattern, the support zone at 137.500 will continue to be tested for a break.
If the price continues to decline beyond the support, the price could reach up to expectations around 134.00 to record the latest 7 -week low.
