EUR/JPY Price Analysis: Bulls crush the rising wedge and lift the pair to 137.50s

• EUR/JPY bulls regain control and get ready to aim towards 138.00.
• Sentiment has improved as China is about to ease some Covid-19 restrictions in Beijing and Shanghai.
• EUR/JPY Price Analysis: The upside break of the rising wedge and the RSI in bullish territory exerts upward pressure on the cross-currency pair.

The EUR/JPY breaks above the top of a rising wedge, invalidate the chart pattern, and records a three-week high, around the 137.50s area, courtesy of an improved market mood and weaker safe-haven currencies. At 137.55, the EUR/JPY trades near-daily highs in the North American session.

The EUR/JPY lifts on positive mood, expectations of a less aggressive US Fed

Asian and European equities closed in the green. As Wall Street is closed, US stock futures trade in the green. Worries about China’s coronavirus outbreak ease as Beijing and Shanghai get ready to relax some restrictions on Wednesday, aiming to boost the economic activity in the second-largest economy. Alongside the previously-mentioned expectations, some central banks, particularly the US Federal Reserve, might slow the rate hikes as investors scaled back aggressive bets on the Fed’s tightening.

Elsewhere, the EUR/JPY Monday’s price action opened near the daily lows around 136.30s and rallied near 100 pips, breaking on its way north the rising’s wedge top-trendline, around 137.00, as EUR/JPY bulls aim towards 138.00 and beyond.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY registered an upside break of the rising wedge, exposing the cross-currency for further gains. EUR/JPY bulls regained control, as shown by the daily moving averages (DMAs), sitting beneath the exchange rate, and the Relative Strength Index (RSI), which was aiming lower, when the EUR/USD retraced from the May 9 high at 138.32 towards May 12 low at 132.89, is now in a bullish territory at 57.13.

With that said, the EUR/JPY’s first resistance would be the 138.00 mark. Break above would expose the May 9 high at 138.32. Once cleared, the EUR/JPY following supply zone would be the YTD high at 140.00.