CFD Trading Rate Euro vs Japanese Yen (EURJPY)

• Daily indicators are pulling back, but remain reem in positive zone.
• For the short-term, the hourly chart indicators reveal a continued bullish bias, with a possibility of minor retractions.
• Fundamentals favored the bears on Monday, and the Yen was one of the best-performing currencies.

The EUR/JPY pair stands at 168.11 under strong bull control, reflecting a steady uptrend with a 0.38% gain on Tuesday. Despite Monday’s sharp losses, the buyers are still in command with indicators near overbought territory on the daily chart, but bears are around the corner waiting their time.

On the daily chart, the Relative Strength Index (RSI) lies just below 70 while the Moving Average Convergence Divergence (MACD) histogram maintains a stable green outlook, signifying a stable positive momentum. Most recently, the RSI is deep in the positive territory, and along with a flat green MACD, indicates that buyers currently dominate the market; however, a near overbought signal suggests potential further consolidation or pullback in the next sessions.

EUR/JPY daily chart

Transitioning to the hourly chart, the RSI oscillates largely within a positive range. Together with the MACD printing decreasing green bars, it shows mild fluctuations but overall remains in favor of the buying force throughout the session. Compared to the daily chart, there appears to be a concordance of bullish sentiment, but with the hourly outlook hinting at possible minor retractions.

EUR/JPY hourly chart

Regarding the broader outlook, it reveals that the EUR/JPY is trading above 20,100 and 200-day Simple Moving Averages (SMA). This still indicates the bull command not only in the short-term picture but significantly in the medium and long-term frames.

• EUR/JPY recovers sharply above 168.00 amid fresh concerns over ECB rate cuts from June.
• The Eurozone inflation rose higher than estimates, and Q1 GDP outperformed expectations.
• The Japanese Yen edges down but holds significant gains reported on Monday.

The EUR/JPY pair recovers further above the crucial resistance of 168.00 in Tuesday’s European session. The cross rises 0.36% after the Eurostat reported that strong preliminary Consumer Price Index (CPI) for April and Q1 Gross Domestic Product (GDP) data.

The agency showed that annual Harmonized Index of Consumer Prices (HICP) rose by 2.4%, remained in line with estimates and the prior reading. The core CPI that strips of volatile food and energy prices grew higher by 2.7% from the consensus of 2.6%.

Meanwhile, the GDP growth in the first quarter was 0.3%, significantly higher from the estimates of 0.1%. The economy remains stagnant in the last quarter of 2023. Sticky inflation combined with robust growth has raised concerns over European Central Bank (ECB) plans of announcing an end to the restrictive monetary policy framework.

The speculation for the ECB pivoting to rate cuts in the June meeting was firm due to consistently declining price pressures. Also, majority of ECB policymakers were comfortable with rate-cut expectations for June while they were divided over whether the rate cut cycle should continue straight after June meeting.

On the Tokyo front, the Japanese Yen has come down slightly against all major currencies after rallying on Monday. Financial markets anticipated that the upside move in the Japanese Yen was the outcome of Japan’s probable intervention. However, Japan’s top currency diplomat didn't confirm any FX intervention in his speech in the European session. Kanda said, "Speculative, rapid and abnormal FX moves have had a bad impact on the economy, so are unacceptable.". Kanda refrained from providing an appropriate level when asked about what could be the probable zone where the administration could intervene if authorities have not stepped yet.

• EUR/JPY holds positive ground around 167.75 in Tuesday’s early European session. 
• Japan's top currency diplomat declined to comment about any intervention move on Monday. 
• ECB’s Knot said inflation in the Eurozone is moving towards the 2% target, while geopolitical tensions pose minor threats.

The EUR/JPY cross trades on a stronger note near 167.75 on Tuesday during the early European session. The cross edges higher despite a likely foreign exchange (FX) intervention by Japanese authorities on Monday. Market players will closely monitor the Gross Domestic Product (GDP) growth number for Q1 and the first reading of the Harmonized Index of Consumer Prices (HICP) from the Eurozone for fresh impetus. 

Early Tuesday, Japan's top currency diplomat, Masato Kanda, offered no comments on FX intervention but said that recent movements have been "speculative, rapid, and abnormal.” Kanda further stated that excessive FX moves could impact daily lives, and the Japanese authorities are ready to take action 24 hours a day. The fear of further FX intervention might provide some support to the Japanese Yen (JPY) in the near term and cap the upside of the cross.  

On the Euro front, European Central Bank (ECB) Governing Council member Klaas Knot said on Monday that inflation in the Eurozone is moving towards the ECB’s 2% target, while geopolitical tensions pose minor threats. Nonetheless, the central bank should still exercise caution when cutting interest rates beyond a first step in June. The ECB policymaker Pierre Wunsch stated that the July rate cut is not a done deal and that he still wants monetary policy to remain a little restrictive. 

The ECB Vice President Luis de Guindos emphasized the progress on inflation but pulled back from making any clear projections on the pace of rate cuts. The uncertainties surrounding the ECB’s rate cut timing are likely to drag the Euro (EUR) lower and create a headwind for the EUR/JPY cross. However, the easing fears of geopolitical tensions in the Middle East might boost riskier assets, benefiting the EUR against the JPY. 

• The daily RSI of the EUR/JPY transitioned from its overbought threshold to near 60.
• In the hourly chart, the RSI reveals intense short-term bearish momentum, with the MACD also depicting increased negative bias.
• Any move below the primary SMAs could alter the bullish trend.

The EUR/JPY pair demonstrates resilience, bouncing back after encountering stern resistance at around the pivotal 165.50 landmark. Having faced a downward momentum of 0.90%, the pair skillfully remains above key Simple Moving Averages (SMAs), underlining the persistent bullish sentiment. Yet, market participants are encouraged to prepare for potential short-term adjustments, as bears are gaining ground.

On the daily chart, the Relative Strength Index (RSI) took a big hit on Monday. Notwithstanding, the current value remains in the positive trend territory, potentially signaling the continuation of buying momentum. The Moving Average Convergence Divergence (MACD) prints decreasing green bars, suggesting that the tide might have turned in favor of the bears.

EUR/JPY daily chart

Turning to the hourly RSI, it is located in the negative territory. This situation highlights possible downward momentum, aligning with the downward trend depicted on the Moving Average Convergence Divergence (MACD) histogram, currently showing rising red bars, denoting strengthened negative momentum.

EUR/JPY hourly chart

Broadening the perspective, the EUR/JPY pair is positioned above the 20-day Simple Moving Average (SMA), having just bounced back strongly after meeting resistance at the crucial 165.50 level. This event furnishes a positive impression of the short-term trend. Additionally, the pair's placement above the 100 and 200-day SMA suggests an overall bullish long-term outlook. However, buyers shouldn’t call it a victory as bears are still around the corner.

• EUR/JPY rises up to its highest ever recorded level of 171.60 before retreating. 
• The pair falls over 1.0% after making its record high, possibly as a result of intervention by the Japanese authorities. 
• Eurozone inflation data for Germany and Spain shows price stickiness, potentially providing support for the Euro. 

EUR/JPY rose to a new all-time high of 171.60 early on Monday before collapsing and retreating over a percentage point, due to direct intervention by the Japanese Ministry of Finance (MOF) to prop up the Japanese Yen (JPY), it was rumored. 

The EUR/JPY beat its previous record high of 169.97 set in 2008, in the early hours of Monday morning, however, it swiftly began to decline thereafter, reaching 165.64 by the time Europe was arriving to work at 07:00 GMT. Since then it has recovered a little, rising back above 167.00 on the back of firm inflation data from Germany and Spain. 

The decline has been put down to rumors of a massive currency intervention by the Japanese authorities. It is possible the move came given the countless verbal warnings from the Japanese Minister of Finance Shun’ichi Suzuki over recent weeks, in which he repeated he was watching currency moves carefully and would intervene if necessary. 

German and Spanish inflation data show signs of stickiness

In Europe, meanwhile, the release of the Harmonized Index of Consumer Prices (HICP) for April, the European Central Bank’s (ECB) preferred inflation gauge, in Germany and Spain, painted a picture of persistent inflation. 

The data suggests interest rates may need to remain higher for longer in the Eurozone to bring down inflation. This in turn could provide support for the Euro (EUR) since higher interest rates attract greater foreign capital inflows.

The HICP for Germany rose by 2.4% in April year-over-year, which was slightly above the 2.3% expected, and 2.3% previous, data from the Federal Statistics Office of Germany showed. 

On a monthly basis, German HICP rose 0.6% in April according to preliminary estimates – the same as forecast and previous. 

In Spain, HICP rose 3.4% YoY in April compared to 3.3% in the previous month, and 0.6% on month, from 1.4% previously, according to data from INE. 

• EUR/JPY faces some sell-off to 166.65 in Monday’s Asian session. 
• The Japanese Yen rebounds from a multi-decade low amid the likely FX intervention from the BoJ. 
• The first reading of the German Consumer Price Index (CPI) will be published later on Monday.

The EUR/JPY cross loses traction to 166.65 during the Asian session on Monday. The cross reaches the intraday low of 166.36 after retracing from 171.60, the highest level since 2008. The downtick of the cross is supported by the speculation that the Bank of Japan (BoJ) might intervene in the foreign exchange (FX) market to prevent the Japanese Yen (JPY) from depreciation.  

The Japanese policymakers warned in recent weeks that they will take the necessary steps to address excessive moves in the Yen if needed after the JPY weakens to a multi-decade low. The Japanese Yen recovers early Monday amid the likely FX intervention from the BoJ, but no official statement has been made thus far as it’s a holiday in Japan. 

 On the other hand, European Central Bank (ECB) policymakers noted that inflation in the Eurozone is cooling down and that the ECB is still likely to begin lowering its deposit rate from a record-high 4% in June. However, investors will take more cues from the incoming inflation data. The first reading of the German Consumer Price Index (CPI) will be due on Monday. On Wednesday, the Eurozone Gross Domestic Product (GDP) for Q1 and the Harmonized Index of Consumer Prices (HICP) will be released. If the reports show a hotter-than-expected outcome, this might lift the Euro (EUR) and cap the downside of the EUR/JPY cross. 

• EUR/JPY climbs nearing the pivotal 169.00 mark, propelled by strong risk appetite and market gains.
• Technical analysis shows a robust uptrend, though an RSI of 76.00 signals overbought conditions.
• If the pair surpasses 169.00, it faces resistance at the July 2008 high of 169.97, closely followed by the key 170.00 level.
• A drop below 169.00 could lead to a pullback to 168.00, further potential supports at the Tenkan-Sen at 166.20 and the Kijun-Sen at 165.84.

The EUR/JPY rallies toward the 169.00 figure yet remains shy of breaching it as risk appetite improves, as Wall Street depicts. At the time of writing, the cross-pair trades at 168.89 and is up by 1.12%.

EUR/JPY Price Analysis: Technical outlook

The daily chart depicts the EUR/JPY as upward biased, even though the rally has overextended. The Relative Strength Index (RSI) is at 76.00, usually seen as overbought, but due to the strength of the uptrend, the 80.00 level is seen as the most extreme condition.

If buyers reclaim the 169.00, the next supply zone would be the July 2008 high of 169.97. Once those two levels are cleared, the next supply zone would be 170.00.

On the flip side, a daily close below 169.00, would pave the way for a retracement to 168.00. Subsequent losses are seen below the Tenkan-Sen at 166.20, followed by the Kijun-Sen at165.84

EUR/JPY Price Action – Daily Chart

• EUR/JPY gains ground near 167.20 amid the weaker JPY on Friday. 
• The BoJ kept interest rates steady around zero on Friday. 
• ECB’s Nagel said he would be in favor of a rate cut in June. 

The EUR/JPY cross drifts higher to 167.20, its highest level since 2008, during the Asian trading hours on Friday. The uptick of the cross is supported by the weaker Japanese Yen (JPY) after the Bank of Japan (BoJ) announced its policy decision. 

The Bank of Japan (BoJ) board members decided to leave the key interest rate unchanged at 0% at its April policy meeting on Friday, as widely expected. The Japanese central bank hiked rates for the first time since 2007 in its March meeting, ending Japan’s negative interest rate era that began in 2016. 

Furthermore, the BoJ provided new forecasts predicting that inflation would remain close to its 2% target over the next three years, indicating that it is prepared to raise borrowing rates later this year. The central bank added it would continue to purchase government bonds in accordance with guidance decided in March to acquire around 6 trillion yen ($38.45 billion) per month. Following the meeting, the Japanese Yen (JPY) attracts some sellers against the Euro (EUR). 

The recent consumer inflation in Tokyo declined sharply in April. The Statistics Bureau of Japan reported on Friday that the headline Tokyo Consumer Price Index (CPI) for April rose 1.8% YoY, compared to the previous reading of a 2.6% rise. Meanwhile, the Tokyo CPI ex Fresh Food, Energy increased 1.8% YoY versus 2.7% expected and the previous reading of 2.9% rise. The softer inflation in Tokyo also weighs on the safe-haven JPY. 

On the Euro front, European Central Bank (ECB) policymaker Joachim Nagel said on Wednesday that he would be in favor of a rate cut in June, adding that such a step would not necessarily be followed by a series of rate cuts. The ECB’s Fabio Panetta said small interest rate cuts will stem the risk of prolonged economic stagnation in the euro area.

• EUR/JPY surges to levels not seen since August 2008, capitalizing on a broader Yen weakness.
• Technical indicators suggest potential for further advances after clearing resistance at 165.30, towards the 169.47 high of August 2008.
• Downside risks remain once EUR/JPY retreats below the recent high of 166.22.

The Euro rallied to a near 16-year high against the Japanese Yen, hitting levels last seen in August 2008, with the latter remaining the laggard in the FX space. Data from the United States (US) prompted investors to buy the Greenback, which sent USD/JPY to refresh multi-year highs. Therefore, the EUR/JPY followed suit and trades at 166.67, gaining more than 0.20%.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY is bullish-biased after consolidating since mid-March below the 165.30s area, previously guarded by March’s 20 high at 165.33. The uptrend resumed toward the 166.00 mark, yet once buyers cleared that hurdle, extending the move to 167.00.

Nevertheless, the EUR/JPY has retreated as buyers take a breather. The momentum its on their side, as shown by the Relative Strength Index (RSI) standing at 68.80, shy of signaling the pair is overbought.

If buyers clear 167.00, that will exacerbate a rally to challenge August’s 2008 monthly high at 169.47, ahead of the psychological 170.00 barrier.

On the other hand, if sellers drag the exchange rate below 166.22 April 24 daily high, that could open the door to sliding toward the March 20 high of 165.33. Subsequent losses beyond this support target the confluence of the Tenkan and Kijun-Sen at 164.83/64.

EUR/JPY Price Action – Daily Chart

• EUR/JPY gains traction near 166.85 on Thursday, the highest level since 2008. 
• The cross keeps the bullish vibe, with the overbought RSI condition.
• The first resistance level will emerge at 166.82; the initial support level is located at 165.35.

The EUR/JPY cross trades in positive territory for the fifth consecutive day during the early European trading hours on Thursday. The cross edges higher to 166.85, its highest level since 2008. The Tokyo April Consumer Price Index (CPI) will be due on Friday ahead of the Bank of Japan (BoJ) interest rate decision. The markets expect the Japanese central bank to leave its policy rate and bond purchase amounts unchanged since BoJ raised interest rates in March for the first time since 2007. The divergence in rates between Japan and the Eurozone is the key factor that weighs the Japanese Yen (JPY) against the Euro (EUR). 

Technically, EUR/JPY maintains the bullish stance unchanged on the four-hour chart as the cross is above the 50-period and 100-period Exponential Moving Averages (EMA) with an upward slope. The Relative Strength Index (RSI) holds in bullish territory above 70. However, the overbought RSI condition indicates that further consolidation cannot be ruled out before positioning for any near-term EUR/JPY appreciation.

The first upside barrier for the cross will emerge near the upper boundary of the Bollinger Band at 166.82. The next hurdle is seen at the 167.00 psychological level. A bullish breakout above this level will see a rally to a yearly high of 2007 at 168.95, en route to an all-time high of 169.78 in July 2008.

On the flip side, the initial support level for the cross is located near a high of March 20 at 165.35. Further south, the next contention level to watch is the 50-period EMA at 165.11, followed by the 100-period EMA at 164.62. A breach of this level will see a drop to the lower limit of the Bollinger Band at 164.30.  

EUR/JPY four-hour chart

• The daily RSI reveals increasing buying momentum, yet nearing overbought conditions hint at a potential technical correction ahead.
• The hourly chart indicates a shift in short-term momentum towards sellers, and indicators consolidate.

The EUR/JPY stands at 165.68, trading with mild gains still in multi-year highs. Current market trends lean towards bullish momentum, keeping buyers in a favorable position. However, daily indicators are nearing overbought conditions, while the hourly ones have already reached that threshold and seem to be consolidating ahead of the Asian session.

The Relative Strength Index (RSI) on the daily chart reveals a positive trend. It has climbed since mid-April from the mid-40s deep into positive territory with the latest reading at 65. This increase in RSI reveals that buyers have recently dominated the market. However, an approach towards the overbought threshold suggests a potential future market correction looming.

EUR/JPY Daily Chart

On the other hand, the hourly chart shows a slight fluctuation in RSI values, which have swung between 48 and 71 during the session and buyers now seem to be taking a breather. The Moving Average Convergence Divergence (MACD) prints flat green bars, adding arguments to a stagnant momentum.

EUR/JPY Hourly Chart

Regarding the overall trend, the EUR/JPY displays a bullish trajectory in the short term while maintaining its position above its 20-day Simple Moving Average (SMA). Turning to a longer time frame, the pair remains above 100- and 200-day SMAs. Such positioning could hint at the potential continuation of bullishness for the EUR/JPY pair.

• EUR/JPY eyes more upside amid uncertainty over BoJ’s neat rate hike.
• Japan Ochi expects that an intervention is possible if the Yen slides further to 160 or 170 vs. the US Dollar.
• The speculation for ECB pivoting to interest rate cuts in June remains firm.

The EUR/JPY pair aims to extend its upside to 166.00 due to persistent weakness in the Japanese Yen. The cross consolidates near multi-year highs but is expected to rise further as investors expect that the Bank of Japan (BoJ) will struggle to tighten its monetary policy further due to absence of significant wage growth spiral.

Apart from that, Japan has raised bar for USD/JPY where the administration could do a stealth intervention has also weighed on the Japanese Yen. In Wednesday’s early European session, Senior Japan Ruling Party Executive Ochi said, "There is no broad consensus right now, but if the yen slides further toward 160 or 170 to the dollar, that may be deemed excessive and could prompt policymakers to consider some action" Reuters reported.

Earlier, investors were speculating that Japan will intervene in the FX domain when the Japanese Yen will drop to 155.00 against the US Dollar. But now higher targets for the major have exposed the Japanese Yen to more downside.

Going forward, investors will focus on the BoJ’s interest rate decision, which will be announced on Friday. A Reuters poll in the April 11-17 period showed that none of the economists have predicted a rate hike move before June. The survey also showed that economists are anticipating that the BoJ will raise interest rates one more time. The survey lacks clear consensus on when exactly the move would come.

Meanwhile, the Euro performs relatively weaker against other currencies as the European Central Bank (ECB) is widely anticipated to cut interest rates in the June meeting. ECB policymaker Villeroy de Galhau said last week that they could cut rates in the next meeting, barring a major surprise. Villeroy emphasized on returning to structural transformation as inflation is receding.

Also, ECB Joachim Nagel said in Wednesday’s European session that a June interest rate cut may not be necessarily followed up by a series of rate cuts. The statement clearly indicates that he is comfortable with a rate cut move in June.

• The daily RSI signals growing buying momentum for the EUR/JPY.
• The daily MACD also shows a strengthening buying momentum.
• On the hourly chart, the same indicators reveal signs of a more immediate buyer dominance.

The EUR/JPY rose towards 165.64 on Tuesday’s session, its highest level since 2008, showcasing clear bullish signals that point to further gains. With buyers in command, the overall landscape for the pair can be viewed as bullish.

On the daily chart, the Relative Strength Index (RSI) shows an ascending trend for the, moving deep in positive terrain. Concurrently, the Moving Average Convergence Divergence (MACD) backs this outlook as its histogram displays ascending green bars, underscoring the positive momentum.

EUR/JPY daily chart

In contrast, the insight from the hourly chart provides a slightly different perspective. While the RSI also showcases an uptrend into positive territory, the current level was higher than that of the daily chart, hinting at a more immediate upward momentum. Simultaneously, the MACD on the hourly chart strengthens the bullish bias, evident from the rising green bars.

EUR/JPY hourly chart

Observing the broader view, the EUR/JPY  stands above its 20, 100, and 200-day Simple Moving Average (SMA), suggesting a strong bullish trend both in the short and long-term perspectives. Overall, bears show no signs of recovering and as bulls capture fresh multi-year highs, there are no technical signals that threaten the clear bullish trend.

• EUR/JPY received support after the release of moderate German PMI data on Tuesday.
• ECB Vice President Luis de Guindos announced that the central bank intends to reduce interest rates in June.
• The Japanese Yen faces obstacles as the BoJ indicated no rush to implement monetary policy measures.

EUR/JPY cross extends its winning streak for the third successive session, hovering around 165.20 during the European trading hours on Tuesday. The Euro gains ground on mixed Purchasing Managers Index (PMI) data from Germany and the Eurozone released on Tuesday.

In April, the initial Eurozone Manufacturing PMI dipped to 45.6, falling short of expectations for an increase to 46.5 from the previous 46.1. However, the Services PMI exhibited strength, reaching 52.9, surpassing the estimated 51.8 and the prior 51.5. The Composite PMI for April showed improvement with a reading of 51.4, exceeding both the previous 50.3 and the anticipated 50.8.

Earlier on Tuesday, the Euro advanced after the release of mixed German PMI data. April's preliminary German Manufacturing PMI rose to 42.2, slightly below the expected 42.8 but up from March's 41.9, marking a two-month high. Services PMI also saw significant improvement, reaching 53.3, surpassing the market's expectation of 50.6 and reaching a fresh ten-month high.

The Japanese Yen (JPY) is encountering hurdles stemming from the widening yield gap between Japan and numerous other key nations. This trend prompts traders to borrow JPY and allocate funds to higher-yielding assets abroad. The Bank of Japan (BoJ) signaled that it is taking a cautious approach regarding policy normalization, indicating no rush to implement such measures.

Furthermore, according to Reuters, Bank of Japan (BoJ) Governor Kazuo Ueda reiterated on Tuesday that the central bank stands ready to increase interest rates if trend inflation progresses towards its 2% target, aligning with its projections. Ueda also noted the challenge of predicting the optimal timeframe for the BoJ to accumulate adequate data before contemplating a policy adjustment.

• The daily chart of EUR/JPY reveals a growing buying momentum, thanks to the RSI and the MACD strengthening.
• The hourly chart shows a shift in market dynamics as indicators favor the buyers.
• Key Simple Moving Averages underline EUR/JPY's superiority, hinting at the potential long-term upside.

The EUR/JPY pair stands at 164.88, showing mild gains of on Monday’s session. The pair exhibits a firm bullish momentum echoed in the strengthening of the indicators on the hourly and daily charts.

Examining the Relative Strength Index (RSI) on the daily chart, indicates a continued rise towards the upper bounds, reinforcing upward momentum. The Moving Average Convergence Divergence (MACD) supports this positive momentum through fresh green bars, indicating strong buyer dominance.

EUR/JPY daily chart

In the hourly chart, the RSI has shown divergence from negative to positive territory, ranging from a low of 40 to a high of 56, which suggests a recovery of the buyers in the session. The hourly Moving Average Convergence Divergence (MACD) supports this as it prints decreasing red bars.

EUR/JPY hourly chart

In evaluating the broader market perspective, according to the Simple Moving Average (SMA), the pair's position above the 20, 100, and 200-day SMAs points towards a potential long-term positive trend. As long as the buyers keep the price above these key levels, the outlook will continue to be in their favor.

• EUR/JPY extends gains on improved risk sentiment due to the de-escalated tensions between Israel and Iran.
• ECB’s Villeroy said that Middle East situation is unlikely to impact the central bank’s intention of rate cuts in June.
• BoJ Governor Kazuo Ueda advocated maintaining the loose monetary policy.

EUR/JPY traded on a stronger note around 164.90 during the early Asian session on Monday. However, the European Central Bank (ECB) will commence interest rate cuts in June, driven by a tepid Eurozone economic outlook and moderating core inflationary pressures. The ECB has conveyed a clear message to markets, suggesting that an interest rate cut could be imminent if significant developments don't occur.

As Reuters reported on Sunday, François Villeroy de Galhau, the governor of the Bank of France, said that the tension in the Middle East is not expected to lead to a significant increase in energy prices, and as a result, it is unlikely to impact the European Central Bank's intention to commence interest rate cuts in June.

The Japanese Yen (JPY) encounters challenges amid a resurgence in risk-on sentiment, with no notable geopolitical developments emerging over the weekend. Antony Blinken, the US Secretary of State, called for restraint following comments from an Iranian official indicating no immediate plans for retaliation against the reported Israeli missile strike. Blinken's statements came after the G7 meeting of foreign ministers in Capri, Italy, as reported by "The Guardian."

Furthermore, Bank of Japan (BoJ) Governor Kazuo Ueda made dovish remarks during a seminar hosted by the Peterson Institute for International Economics on Friday, according to Reuters. Ueda emphasized the necessity for the BoJ to maintain accommodative monetary policies in the foreseeable future due to underlying inflation remaining "somewhat below" the 2% target, with long-term inflation expectations hovering around 1.5%.

• Flattening indicators on the daily chart may signal a period of consolidation.
• The flat RSI slope and falling MACD bars on the hourly chart translate into a neutral sentiment for the session.

The EUR/JPY currency pair stands at 164.71, reflecting a persistent bullish upsurge as it cleared daily losses and defended the 20-day Simple Moving Averages (SMA). However, caution is warranted considering the shifting market environment as the flattening momentum, revealed on the daily and hourly chart may cool down the bullish outlook.

On the daily chart, the Relative Strength Index (RSI) pair is trending positive, at 58 but flattened. Simultaneously, the Moving Average Convergence Divergence (MACD) reveals red bars, hinting at a steady selling pressure.

EUR/JPY daily chart

Taking into account the hourly chart, the latest RSI value is just above the middle ground at 53, also with a flat slope. This signifies neutrality within the market. Meanwhile, the MACD decreasing green bars, signaling a potential slowdown in the upward pressure.

EUR/JPY hourly chart

In light of the recent market conditions, the EUR/JPY lies above its 20,100, and 200-day SMA, depicting a sturdy ascending pattern in its broader outlook. It suggests the pair have shown resilience in maintaining the bullish momentum both from a short-term and long-term perspective. On Friday, the cross held onto the 20-day SMA at 164.00, suggesting that the bulls remain resilient. Essentially, if the pair continues to stay above the SMA's, it could extend its upward trajectory, enhancing its technical stance in the forthcoming sessions.

• The RSI on the daily chart of EUR/JPY indicates sustained bullish momentum.
• Hourly chart shows an RSI below its mid-zone and MACD with rising red bars, pointing towards possible consolidation.
• The EUR/JPY's position above main SMAs underscores a strong bullish bias.

The EUR/JPY slightly declined to 164.70 in Thursday’s session. That being said, the overall trend still favors the bulls but a consolidation phase, suggested by bears dominating the hourly chart, may create a balanced playing field for both buyers and sellers ahead of the Asian session.

On the daily chart, the Relative Strength Index (RSI) for the EUR/JPY pair is in positive territory, with a most recent reading of 58. This suggests that the pair's upsurge might remain intact as long as the RSI stays above the 50 mark, indicating that buyers are in control at this moment.

EUR/JPY daily chart

Meanwhile, on the hourly chart, the EUR/JPY's RSI declined below its middle zone, with the latest reading of 44 as of the last hour. This could point towards a pending period of consolidation. The Moving Average Convergence Divergence (MACD) displays rising red bars, also hinting at a temporary slowdown in the bullish momentum.

EUR/JPY hourly chart

Regarding the Simple Moving Average (SMA), the cross EUR/JPY holds strong above its 20, 100, and 200-day SMAs, indicating a bullish stance. That being said the pair must defend the 20-day SMA at 164.00 which is a strong support to maintain the positive short-term outlook.

• EUR/JPY continues rising after the release of final Eurozone inflation data shows no change from estimates. 
• Comments from the Japanese Cabinet Secretary suggest the authorities may be close to an FX market intervention. 
• Further commentary from ECB speakers could cause fluctuations for EUR/JPY. 

The EUR/JPY is trading in the mid 164.00s on Wednesday, up by over a tenth of a percent. The pair’s fluctuations seem to have been mainly driven by a combination of Eurozone inflation data and comments from a Japanese government official designed to support the Japanese Yen (JPY). 

EUR/JPY rose following the release of the final figure for March Eurozone Harmonized Index of Consumer Prices (HICP) by Eurostat. The final estimate showed no change from the initial release, which showed a 2.4% YoY rise in HICP and 2.9% in core HICP. This also meant both readings were still below the 2.6% and 3.1% readings respectively of the previous month. 

Whilst the data showed no change, the Euro (EUR) rose in most pairs following the release, perhaps because market expectations had fallen. Recent dovish comments from European Central Bank (ECB) officials, have suggested an increasing willingness to cut interest rates because of falling inflation and stuttering growth, and this could have been responsible for the lower outlook. 

On Tuesday, for example, ECB President Christine Lagarde said that the ECB will cut rates soon, bar a surprise, and that the ECB was keeping a close eye on Oil prices due to tensions in the Middle East. 

EUR/JPY upside has likely been tempered by comments from Japan’s Chief Cabinet Secretary Yishimasa Hayashi, who issued a verbal intervention on Wednesday to prop up the Yen. Hayashi said that “we are closely watching FX moves” and are “prepared for full measures.”

This may indicate the Japanese authorities are seriously considering a direct intervention in FX markets in which they would sell their FX reserves to buy JPY in the hope of strengthening it. The knock-on effect of such an intervention, though felt most keenly in USD/JPY, would probably result in a weakening in the EUR/JPY pair. 

His intervention may have come on the back of recent comments from Federal Reserve Chairman Jerome Powell, in which he said “Recent data shows a lack of further progress on inflation this year,” adding, “If higher inflation persists the Fed can maintain current rate as long as needed.” 

His comments led to an appreciation of the US Dollar because the maintenance of higher interest rates tends to be positive for a currency. This is due to the fact that it increases foreign capital inflows. Powell’s remarks resulted in USD/JPY rising to above 154.00. This is above the ideal 150.00 threshold beyond which the Japanese do not like to see their currency devalue. 

A string of speeches by key ECB members during Wednesday, including ECB Executive Board Member Piero Cipollone, ECB Executive Board Member Isabel Schnabel and President Christine Lagarde herself could also impact the EUR/JPY’s volatility. 

The release of Japanese trade data overnight had little effect on the exchange rate.  The data showed only a slight moderation in Exports, which continued to grow by above 7.0% year-on-year in March, a fall in Imports by 4.9% (after a 0.5% rise in the preceding month), and a surplus trade balance of ¥366.5 billion from a ¥377.8 billion deficit in February.