The price chart of the EUR/JPY currency pair is showing a rebound after the plunge, with the banking crisis and the results of the European central bank meeting being price drivers.
Previously, the bank collapse crisis in the United States (US) that spread to Europe had the effect of depreciating the Euro, while the Yen also strengthened following the demand for safe-havens increased in a risky market environment.
However, the actions of other giant banks that tried to help provide financial support to the affected banks slightly eased the panic that hit the market.
Meanwhile, the European Central Bank (ECB) which raised interest rates to 50 basis points at the policy meeting yesterday was seen to have a mixed effect on the Euro currency.
When the results of the meeting, the Euro experienced a decrease first before returning to stability and rising again towards the end of the New York session.
So, if you look at the price movement on the EUR/JPY chart, the price drop is seen to fail to penetrate the 140.00 level which is the support level for the price.
During the reaction of the ECB meeting yesterday as well, the price dropped to test the level but bounced back again.
Continuing trading today (Friday), the price was flat throughout the Asian session until entering the opening of the European session at around 141,600 with the Moving Average 50 (MA50) level also tested on the movement in the 1-hour timeframe of the EUR/JPY chart.
If the price continues to rise after yesterday's rebound, it is likely that the 145.00 level will be reached again after the price plunge last Wednesday started around that.
Once more bullish signals can be observed, the price can be expected to head towards the 146.500 zone or reach 148.00 to record the latest 5-month high.
However, if the price resumes its decline, the 140.00 support level will be tested again and the price reaction will be observed.
If the breakout is lower, the price will continue the bearish trend and the expected decline can reach around 137.500 or 136.600.
Investors will be keeping an eye on the release of European inflation data at 6pm local time which is seen to drive the movement of the Euro currency in these final sessions.
