CFD Trading Rate Euro vs Japanese Yen (EURJPY)

• EUR/JPY finishes week with a 0.66% gain, reflecting persistent JPY softness against a backdrop of economic data.
• Technical analysis shows YTD high at 163.21, with support and resistance levels indicating potential upward momentum.
• Key technical levels outlined for potential reversals or further advances in the EUR/JPY pair's trajectory.

The EUR/JPY wraps up Friday session with losses of 0.02% but is set to finish the week with 0.66% gains, courtesy of overall Japanese Yen (JPY) weakness, as economic data doesn’t justify the Bank of Japan (BoJ) finishing negative interest rates. At the time of writing, the cross exchanges hands at 162.86, virtually unchanged.

From a technical standpoint, the pair printed a new year-to-date (YTD) high at 163.21 but failed to cling to gains above the 163.00 figure. That opened the door for a pullback, capped at around the day’s low of 162.64, which keeps buyers hopeful of higher prices. Achieving a daily close above 163.00 would open the door to testing the November 27 high at 163.72, ahead of the 164.00 mark.

Conversely, if sellers step in, they would clash with the Tenkan-Sen, first support at 162.11. the next support will emerge at January’s 19 high turned support at 161.87, followed by the Senkou Span A at 161.44.

EUR/JPY Price Action – Daily Chart

• EUR/JPY gains ground near 163.07 in Friday’s early European session. 
• German GDP growth numbers contracted 0.3% QoQ and 0.2% YoY in Q4. 
• The verbal intervention by Japanese authorities and the rising Middle East geopolitical tensions might cap the JPY’s downside. 
• Investors will monitor the German IFO survey for February and the ECB's Schnabel speech on Friday. 

The EUR/JPY cross extends its upside near the 163.00 psychological barrier during the early European session on Friday. The pair edges higher after the German GDP growth number for Q4 matched the market estimation. The cross currently trades around 163.07, gaining 0.12% on the day. 

The latest data from the Federal Statistics Office of Germany on Friday showed that the German Gross Domestic Product for the fourth quarter (Q4) contracted by 0.3% QoQ and 0.2% YoY in Q4. Both figures were in line with market expectations. 

On Thursday, the Eurozone Composite PMI for February came in higher than the consensus forecast, improving to 48.9 from 47.9 in January. The improvement in the Composite PMI was primarily due to an increase in the services PMI, which climbed to 50.0 in February from 48.4 the previous month. The Manufacturing PMI declined to 46.1 in February from 46.6 in January, worse than the expectation of 47.0. This report suggests that the Eurozone manufacturing sector remained in deep contraction territory in the first quarter of 2024. 

The minutes of the European Central Bank’s (ECB) January meeting illustrate the currently ongoing shift in the ECB’s inflation assessment, but the very cautious and gradual shift suggests that rate cuts in spring are highly unlikely. Instead, the ECB will want to wait until first-quarter data confirms receding inflationary pressure, a modest economic recovery, and no acceleration of wage growth to slightly reduce the current monetary policy restrictiveness. 

On the other hand, the verbal intervention by Japanese authorities might cap the downside of the Japanese Yen (JPY). Japan's Ministry of Finance and Bank of Japan (BoJ) governor have warned that they are closely watching the FX rate and would intervene in the market to prevent further weakening in the home currency if needed. Additionally, the escalating geopolitical tensions in the Middle East might boost the safe-haven currency JPY and act as a headwind for the EUR/JPY cross. 

Moving on, market participants will focus on the German IFO survey for February and ECB's Schnabel speech, due on Friday. Next week, the Japanese National Consumer Price Index (CPI) will be released. 

• EUR/JPY climbs 0.18%, buoyed despite optimism for ECB rate cuts in a disinflationary environment.
• Crossing Tenkan-Sen, targets 163.00 resistance, aiming for November's peak at 164.31 in ongoing uptrend.
• Potential pullback to find support at Tenkan-Sen (161.92), with subsequent supports at 161.34 and 160.77.

The Euro clings to decent gains versus the Japanese Yen late during the North American session, amid a mixed market mood. Eurozone (EU) economic data showed the disinflation process amongst countries in the bloc continued and has opened the door to discussions that the European Central Bank (ECB) might cut rates sooner rather than later. At the time of writing, the EUR/JPY exchanges hands at 162.91, up 0.18%.

The cross-pair has extended its gains past the Tenkan-Sen level and the 162.00 figure, as the Relative Strength Index (RSI) is close to entering overbought levels. However, as the uptrend remains strong, the RSI might get to the 80 level before the EUR/JPY tumbles. Therefore, the pair’s next resistance level sits at 163.00, followed by the November 16 high at 164.31.

On the flip side, if EUR/JPY retreats below the 162.00 mark, sellers could challenge the Tenkan-Sen at 161.92. Once cleared, the next support would be the Senkou Span A at 161.34 before challenging the Kijun-Sen level at 160.77.

EUR/JPY Price Action – Daily Chart

• EUR/JPY attracts some buyers near 162.80 in Thursday’s early European session.
• Japanese authorities came with a verbal intervention, which might lift the JPY. 
• ECB’s Wunsch said the ECB may not cut the interest rate as quickly as some expect.

The EUR/JPY cross gains momentum for the third consecutive week during the early European trading hours on Thursday. However, the potential intervention in the market by the Japanese authorities might boost the Japanese Yen (JPY) and cap the upside of the EUR/JPY cross. At press time, EUR/JPY is trading at 162.80, gaining 0.19% on the day. 

On Thursday, Japanese Finance Minister Shunichi Suzuki and Bank of Japan (BoJ) Governor Kazuo Ueda made a verbal intervention, saying that they will monitor the foreign exchange moves with a high sense of urgency. This, in turn, might lift the JPY for the time being. Apart from this, the ongoing geopolitical tensions in the Middle East might support safe-haven assets like the Japanese Yen. 

On the Euro front, European Central Bank (ECB) Governing Council member Pierre Wunsch said that the ECB may not cut the interest rate as quickly as some expect. Investors increased their bet on an ECB rate cut as soon as April, but many policymakers signaled that the June meeting looks more likely as additional data will be available then. 

Traders will monitor the preliminary HCOB PMI from Germany and the Eurozone for February. Also, the Consumer Price Index (CPI) from Italy and the Eurozone will be released. On Friday, the German Gross Domestic Product (GDP) for Q4 will be published. Market players will take cues from the data and find trading opportunities around the EUR/JPY cross. 

• EUR/JPY ascends to 162.47, marking a continuous rise influenced by recent Fed monetary policy insights.
• Technical analysis points to key resistance levels, with 163.00 and 163.72 as immediate targets.
• Potential pullback could see support tests at 161.48 and 160.91, depending on market dynamics.

The Euro extended its gains for the second straight day against the Japanese Yen and is up by 0.22% as the EUR/JPY trades at 162.47 late during the North American session.

The release of the latest Federal Reserve (Fed) minutes sponsored a leg-up in the EUR/JPY as the EUR/USD edged slightly up. From a technical standpoint, the pair is trading at year-to-date (YTD) highs, aiming to extend its gains. The first resistance would be the 163.00 figure, followed by the November 27 high at 163.72. A further upside is seen at 164.00, followed by last year’s high at 164.31.

On the flip side, if the pair drops below 162.00, that would pave the way to test the Tenkan-Sen at 161.48 before slumping toward the Senkou Span A at 160.91.

EUR/JPY Price Action – Daily Chart