It rises above 156.00 as the bulls face a key resistance area

• EUR/JPY remains bearish despite recent recovery, with momentum flattening and potential consolidation ahead.
• A break above 157.00 could target resistance at 157.46 (Tenkan-Sen) and 158.49 (Senkou Span A).
• For a bearish continuation, EUR/JPY needs to break below 155.14, with the YTD low at 154.39 as the next support level.

EUR/JPY bounced back on Monday, posting gains of over 0.40% to break above the 156.00 mark. As the Asian session begins on Tuesday, the currency pair is changing hands at 156.51, basically unchanged.

Last week, the European Central Bank (ECB) cut interest rates by 0.25%, but signaled it would most likely pause at its October meeting due to a lack of data available to policymakers. This boosted the euro, although the jump could be short-lived as a monetary policy decision from the Bank of Japan (BoJ) looms.

EUR/JPY Price Forecast: Technical Insights

The pair remains biased despite recovering from a decline of over 4.70%. The momentum is bearish, but has paid off, suggesting consolidation is ahead. That said, EUR/JPY could remain capped in the 150-pip volatility range.

If EUR/JPY rises above 157.00, the next resistance will be the Tenkan-Sen at 157.46. A breach of the latter will expose the Senkou Span A at 158.49, followed by the Kijun-Sen at 159.52.

Conversely, for a bearish continuation, EUR/JPY needs to break below the September 16 low of 155.14. The next support would be the year-to-date (YTD) low of 154.39.

EUR/JPY Price Action – Daily Chart