EUR/JPY Bounces Back, Eyes 184.64 and Beyond

The EUR/JPY currency pair rebounded from its low of 179.34 last week, continuing its upward trend after a brief retreat. According to technical analysis, the entire fall from 187.93 could be considered a three-wave correction.

This suggests that the initial bias remains on the upside this week, targeting a potential price of 184.64, which represents the 61.8% retracement of the drop from 187.93 to 179.34.

A decisive break above this level could pave the way for a retest of the high at 187.93. On the other hand, if prices fall below the support level of 183.14, it will turn the bias neutral again.

In the bigger picture, the rebound from the rising 55-week Exponential Moving Average (EMA) has kept the uptrend intact since the low of 114.42 in 2020. A break above 187.93 could aim for a target price of 194.88, which is based on the 78.6% projection of the drop from 124.37 to 175.41.

However, if prices sustainably break below the 55-week EMA at 180.23, it would argue that the currency pair has entered a medium-term downtrend towards the resistance turned support level of 175.41.