Eurjpy Remains Supported

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Eurjpy Remains Supported

Eur/Jpy Remains Supported As Ecb Hold Rates

EUR/JPY has been trading at familiar levels since the ECB's decision to maintain the rates at the current levels. This means the deposit rate in Europe is still 3.75%, in line with the forecasts made by the economists.

It seems that the ECB is still utilizing its approach of looking at the data and monetary policy on a meeting-by-meeting basis. This means the traders and the market players will not get any interest rate path on when to expect a rate cut or a rate hike.

Eur/Jpy Shows Short-Term Recovery

Currently, the EUR/JPY cross is seen near the 171.00 handle after retreating from the 171.19 (daily high.) The bottom line is that the European Central Bank has maintained its cautious stance and continues to monitor the data before making any big moves.

ECB's monetary policy statement has also cleared the issue of an uptick in the core inflation by classifying it as a one-off factor. They also commented on how most of the other measures showed a decline or remained stable.

As for the ECB's APP (Aset Purchase Program), the central bank has decided to lower its portfolio by not investing the full amount once again.

Technical analysis of the EUR/JPY shows that it moved lower to around 170.01, the low for the day. However, the cross has since recovered some of the lost ground and even climbed above the 50 EMA near 170.75.

Despite the short-term recovery, the momentum still favors the JPY, as evidenced by the RSI reading. At the same time, the fear of intervention is now larger than ever, as the BoJ has already made some moves in the last week.

As long as EUR/JPY floats above 171.00, it will easily move towards the next target at 172.83. Once this roadblock is cleared, the next resistance levels will be 171.47 and 172.72, based on the Ichimoku indicator.

Another scenario is that the 171.00 is lost to the EUR sellers, which will expose the 170.00 support zone, located inside the Ichimoku cloud.

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