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EURJPY Correction
EURJPY is at a critical juncture ahead of the ECB meeting today. Following a breakout above the 148.37 level last week, price has since reversed from highs above 152 and is now retesting the breakout area. JPY has gained firmly over recent days amidst the downturn in risk appetite ahead of the FOMC yesterday. However, with the Fed having signalled a likely pause after yesterday’s .25% hike, there is room for stocks to climb higher near-term which should lead to a softening of JPY.
Hawkish ECB Risks
EUR has plenty of upside risk into today’s meeting. With inflation still elevated in the eurozone and the bank behind others in its tightening schedule, there is room for the ECB to push ahead with further tightening, in contrast to peers such as the BOC and Fed which have pivoted. With the BOJ having recently reaffirmed its commitment to keeping rates on hold, fresh hawkishness from the ECB today (either a larger hike or a more hawkish outlook) should fuel a fresh wave of buying in EURJPY, turning the pair higher once again. The retail market is currently around 70% short the pair, suggesting plenty of room for a bullish reversal here.
Technical Views
EURJPY
The breakout above the 148.37 level saw the pair trading as high as 152.13 before reversing lower. Price is now at a key support level, retesting those broken highs along with the bull channel lows. Momentum studies have weakened but are still bullish and, while 148.37 holds, the focus is on a fresh move higher and an eventual breakout above 152.13.
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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.