EURJPY Longs in Focus
EURJPY is looking good for longs today with the retail market heavily short against the current breakout. The rally in risk assets over the last 24 hours has fuelled a sharp weakening of JPY. With safe haven flows reduced, the Yen has been falling while higher stock prices have helped lift EUR sentiment. The Bank of Japan meeting earlier today has also kept pressure on JPY with the BOJ holding monetary policy unchanged.
JPY Under Pressure
EUR meanwhile has been firmer recently on the back of a slew of hawkish ECB commentary which is keeping ECB rate hike expectations in focus ahead of the meeting next week. With eurozone inflation still at elevated levels, the market is widely expecting the bank to press ahead with a further hike next week which should keep EUR supported in the run up to the meeting at least. Beyond that, the path of EUR will very much depend on the bank’s outlook and rate signalling.
Looking ahead today, US PCE data will be in focus and should keep the current risk rally intact. If stocks are seen moving higher on the back of the data this should keep JPY pressured, allowing EURJPY room to move higher near-term.
Technical Views
EURJPY
The rally in EURJPY has seen the market breaking out above the 148.37 level with the bull channel continuing to develop. With momentum studies bullish and the retail market heavily short, EURJPY focus remains on further upside near-term with the 149.75 level the next hurdle for bulls to overcome.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.