EUR/JPY rally stalls at the confluence of 4-hr 100-MA & 4-hr 200-MA

The rally in the EUR/JPY pair from the low of 122.40 has stalled at 123.98 (4-hour 100-MA + 4-hour 200-MA) as Yen sellers are taking a breather ahead of the BOJ rate decision.

The BOJ is expected to keep rates unchanged and reiterate the necessity to run the QE program for a prolonged period of time, given the inflation remains weak. However, concerns about the BOJ’s balance sheet size are mounting.

A significant minority believes Kuroda might talk about how the bank intends to taper its balance sheet, although the central bank chief will remain non committal.

EUR/JPY Technical Levels

The cross was last seen trading around 123.94. A break above 123.98 (4-hour 100-MA + 4-hour 200-MA) would open up upside towards 124.39 (June 6 high) and 124.54 (May 9 high). On the other hand, a break below 123.75 (June 13 high - support on the 4-hour chart) would expose 123.37 (4-HR 50-MA) and 123.00 levels.

Note - A retreat from the current level would yield a bearish crossover between 100-MA and 20-Ma on the 4-hour chart.