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CFD Trading Rate Euro vs Japanese Yen (EURJPY)

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  • 28.02.2024 06:48
    EUR/JPY Price Analysis: The bullish outlook remains intact above the 163.00 mark
    • EUR/JPY trades on a softer note around 163.05 in Wednesday’s early European session.
    • The positive outlook of the cross remains intact above the key EMA; RSI indicator supports the bullish momentum.
    • The immediate resistance level is seen at 163.21; the key support level is located at the 162.60–162.70 zone.

    The EUR/JPY cross finds support above the 163.00 psychological figure during the early European trading hours on Wednesday. The upbeat Japanese inflation data for January surprised the upside and sparked speculation that the Bank of Japan (BoJ) will exit negative interest rates by June this year. This, in turn, lifts the Japanese Yen (JPY) and weighs on the EUR/JPY cross. The cross currently trades near 163.05, down 0.09% on the day. 

    Technically, EUR/JPY maintains the bullish bias unchanged as the cross holds above the 50- and 100-period Exponential Moving Averages (EMA) on the four-hour chart. The upward momentum is supported by the Relative Strength Index (RSI), which lies above the 50-midline, indicating the path of least resistance is to the upside. 

    A high of February at 163.21 acts as an immediate resistance level for EUR/JPY. Further north, the upper boundary of the Bollinger Band at 163.60 will be the next upside barrier. A bullish breakout above this level will pave the way to a psychological mark at 164.00. 

    On the flip side, the crucial support level will emerge at the 162.60–162.70 region, portraying the confluence of the lower limit of the Bollinger Band and the 50-period EMA. The additional downside filter to watch is the 100-period EMA at 161.90. The next contention level is seen at a low of February 15 at 160.91, followed by a low of February 12 at 160.38.

    EUR/JPY four-hour chart

     

     

  • 27.02.2024 20:27
    EUR/JPY Price Analysis: Retreats amid speculation of BoJ hike, technicals signal potential downside
    • EUR/JPY faces a 0.17% decline as Japan's core inflation rise hints at a possible end to negative interest rates.
    • Technical patterns, including a 'bearish harami', suggest further downside, with key levels to watch at 162.56 and 162.00.
    • Recovery above 163.00 could open the path to 164.00, contingent on overcoming resistance near the week's high at 163.72.

    The EUR/JPY is dropping late in the North American session, set to register losses of around 0.17% on Tuesday. A rise in core inflation in Japan sparked speculation that the Bank of Japan (BoJ) could increase interest rates, ending the negative interest rate cycle. Therefore, the cross-pair trades at 163.22 after hitting a daily high of 163.52.

    EUR/JPY Price Analysis: Technical outlook

    From a technical standpoint, the EUR/JPY failed to extend its rally and edged lower. Nevertheless, price action is well contained within the boundaries of Monday’s price action, which would form a ‘bearish harami’ candlestick chart pattern, suggesting that further downside is expected.

    If the EUR/JPY tumbles below 163.00 and decisively breaks below the February 26 low of 162.56, that would exacerbate a test of the 162.00 mark, but on its way south, sellers will face the Tenkan-Sen at 162,31.

    Conversely, if buyers keep the exchange rate above 163.00, the EUR/JPY could edge higher above the current week's high at 163.72, which could pave the way for testing the 164.00 mark.

    EUR/JPY Price Action – Daily Chart

     

  • 27.02.2024 07:01
    EUR/JPY drifts lower amid growing speculation on BOJ normalization
    • EUR/JPY attracts some sellers near 163.28 on the stronger-than-expected Japanese inflation data. 
    • Japan’s two-year bond yield climbed to the highest level since 2011 amid growing speculation the BoJ will abandon its negative rate policy by spring. 
    • ECB’s Lagarde reaffirmed its restrictive policy stance, as the decline in headline inflation acts as a safeguard against a sustained wage-price spiral.

    The EUR/JPY cross trades in negative territory after being rejected from the multi-month highs of 163.50 during the early European trading hours on Tuesday. The hotter-than-expected Japanese CPI data has prompted investors to be more cautious about the probability of the BOJ exiting negative interest rate policy at the March meeting, which provides some support to the Japanese Yen (JPY). At press time, the cross is trading at 163.28, losing 0.15% on the day. 

    The Japanese government bond (JGB) yields edge higher on Tuesday after Japan’s inflation data surprised to the upside, raising speculation that the Bank of Japan (BoJ) will exit negative interest rates by June this year. This, in turn, boosts the Japanese Yen and acts as a headwind for the EUR/JPY cross. 

    Early Tuesday, the Japan Statistics Bureau revealed that the nation’s National Consumer Price Index (CPI) for January came in at 2.2% YoY from 2.6% in December. Meanwhile, the National CPI ex Fresh food came in better than expected, arriving at 2.0% YoY in January versus 2.3% prior.

    On the Euro front, European Central Bank (ECB) President Christine Lagarde said on Monday that inflation continues to ease toward central bank targets. However, the ECB remains committed to restrictive policy measures for the time being. Lagarde added that the fourth-quarter wage growth numbers are positive, but not enough to give the ECB confidence that inflation has been conquered.  

    Investors will take more cues from the German Consumer Price Index (CPI) and Eurozone Harmonized Index of Consumer Prices this week for fresh impetus. On the Japanese docket, the Industrial Production will be due on Thursday and the Unemployment Rate will be released on Friday. 

     

  • 26.02.2024 20:08
    EUR/JPY Price Analysis: Surges past 163.00 and hits new YTD high
    • EUR/JPY climbs, leveraged by JPY's broad decline on Japan's cooling economy and inflation forecasts.
    • Technical momentum suggests a test of the 164.00 level, with potential resistance at November's peak.
    • Initial support at 163.00, with further downside targets including Tenkan-Sen and Senkou Span A levels.

    The EUR/JPY advances sharply and regains the 163.00 figure as traders capitalize on the broad Japanese Yen (JPY) weakness. The latest fundamental news from Japan is that its economy is cooling, while inflation is expected to get below the Bank of Japan's (BoJ) 2% goal on its core figures. At the time of writing, the pair exchanged hands at 163.55, up 0.42%.

    From a technical perspective, EUR/JPY rose to a new year-to-date (YTD) high at 163.72, though the exchange rate retreated somewhat amid fears that Japanese authorities might intervene in the Forex markets. Given the backdrop, the uptrend remains intact, and the pair could challenge the 164.00 figure in the near term. A breach of that level would expose the November 16 high at 164.31, followed by the 165.00 mark.

    On the flip side, the EUR/JPY first support would be the 163.00 figure. If sellers push the spot price below Monday’s low of 162.56, look for a deeper pullback past the Tenkan-Sen at 162.31 as bears eye the Senkou Span A at 161.61 before the Kijun-Sen at 160.90.

    EUR/JPY Price Action – Daily Chart

     

  • 26.02.2024 07:14
    EUR/JPY holds below the 163.00 mark amid intervention fears
    • EUR/JPY trades on a weaker note around 162.85 in Monday’s early European session. 
    • ECB's Stournaras said the central bank won’t have enough data to decide on rate cuts until June. 
    • A technical recession in Japan might prompt the BoJ to delay an exit from negative rates, which exerts some pressure on the JPY. 

    The EUR/JPY cross holds below the 163.00 mark during the early European session on Monday. The concern about a technical recession in Japan and the risk-on mood weigh on the Japanese Yen (JPY). However, the warning from Japanese authorities to intervene in the FX market might cap the downside of the JPY. The cross currently trades near 162.85, down 0.01% on the day. 

    The European Central Bank (ECB) Governing Council member Yannis Stournaras said on Friday that the central bank won’t have enough data to decide on interest-rate cuts until June, despite inflation seeming to be on pace to reach the 2% target this year. Meanwhile, ECB policymaker Mario Centeno said the central bank might be ready to consider cutting rates next month, if data call for it, even if that’s only a low-probability event. That being said, the divergence of monetary policy between the ECB and the Bank of Japan (BoJ) provides some support to the Euro (EUR) and acts as a headwind for the EUR/JPY cross. 

    On the other hand, Japan entered a technical recession as its Gross Domestic Product (GDP) unexpectedly contracted for two consecutive quarters and surrendered its position as the world's third-largest economy to Germany. The weaker GDP growth number might convince the BoJ to delay an exit from negative rates. This, in turn, drags the JPY lower against its rivals.

    However, verbal intervention from the Japanese authorities might lift the JPY. Japan's Finance Minister Shunichi Suzuki said last week that the government is closely watching FX moves with a high sense of urgency. 

    The Japan’s Consumer Price Index (CPI) for January will be due on Tuesday. On Thursday, the German Retail Sales and CPI data will be released. The attention will shift to the Eurozone Harmonized Index of Consumer Prices (HICP) data on Friday. Traders will take cues from the data and find trading opportunities around the EUR/JPY cross. 

     

     

  • 23.02.2024 21:53
    EUR/JPY Price Analysis: Closes week higher despite daily losses, buyers eye 163.00
    • 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

     

  • 23.02.2024 07:08
    EUR/JPY extends its upside above 163.00 following German GDP data
    • 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. 



     

  • 22.02.2024 20:53
    EUR/JPY Price Analysis: Reclaims 162.00 as buyers target 163.00 before reaching overbought levels
    • 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

     

  • 22.02.2024 06:25
    EUR/JPY gathers strength below 163.00, eyes on Eurozone PMI data
    • 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. 

     

  • 21.02.2024 20:13
    EUR/JPY Price Analysis: Gains momentum after Fed minutes release, traders eye 163.00
    • 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

     

  • 15.02.2024 11:56
    EUR/JPY retreats despite the technical recession in Japan, edges lower to near 161.10
    • EUR/JPY loses ground due to expected intervention in the Forex market.
    • Japan's Shindo expects for close collaboration between the BoJ and the government to implement suitable monetary policies.
    • Japan’s GDP Q4 eases to a 0.1% decline; indicating a technical recession.
    • ECB's forward-looking wage tracker signals solid wage pressures.

    EUR/JPY retreats from recent highs after Japan's top officials hinted at a potential intervention in the Forex market to curb further weakness in the Japanese Yen (JPY). Additionally, the escalated geopolitical tensions in the Middle East boost demand for the safe-haven JPY and drags the EUR/JPY cross to 161.10 during the European session on Thursday.

    On Thursday, Japan's Economic Minister Yoshitaka Shindo commented that specific monetary policy measures are within the purview of the Bank of Japan (BoJ) to determine. He acknowledged that the BoJ considers a variety of data, including consumption patterns, economic projections, and associated risks when formulating monetary policy.

    Economic Minister Shindo expressed expectations for close collaboration between the BoJ and the government to implement suitable monetary policies aimed at sustainably achieving the price stability target, alongside fostering wage growth.

    The preliminary Japan’s Gross Domestic Product (GDP) eased to a 0.1% decline QoQ from the previous decline of 0.8%, against the expected increase of 0.3% in the fourth quarter. The weak fourth-quarter Gross Domestic Product (GDP) figures in Japan add complexity to the monetary policy outlook for the Bank of Japan (BoJ).

    Rather than experiencing slight growth compared to the third quarter, the economy faced contraction once again. This development indicates that Japan has entered a technical recession in the latter half of 2023, as negative growth persisted in the third quarter, albeit at a more significant magnitude.

    However, the Euro (EUR) encountered obstacles subsequent to the publication of the seasonally adjusted Eurozone Gross Domestic Product (GDP) data on Wednesday, which remained unchanged as anticipated for the fourth quarter. Despite this, the ECB's forward-looking wage tracker continues to signal robust wage pressures.

    Christine Lagarde, President of the European Central Bank (ECB), remarked that recent data suggests continued subdued economic activity in the near term. While acknowledging the ongoing disinflationary trend, Lagarde stressed the importance of instilling confidence that this trajectory will ultimately lead to the sustainable attainment of the ECB's 2% inflation target.

     

  • 14.02.2024 06:10
    EUR/JPY weakens below 161.30 ahead of Eurozone GDP data
    • EUR/JPY weakens following the verbal intervention by Japanese authorities on Wednesday. 
    • Japan's top currency diplomat Masato Kanda said authorities will take steps in the market if needed.
    • ECB’s Lane said the number of rate cuts will depend on the data. 
    • Traders will closely monitor the Eurozone GDP growth numbers for Q4, due on Wednesday. 

    The EUR/JPY cross loses momentum during the early European session on Wednesday. Some verbal intervention from the Japanese authorities boosts the Japanese Yen (JPY) and weighs on the EUR/JPY cross. Investors await the Eurozone Gross Domestic Product (GDP) for the fourth quarter. This event might trigger volatility in the market. At press time, the cross is trading at 161.23, down 0.14% on the day. 

    Early Wednesday, Japan's top currency diplomat Masato Kanda warned that recent movements in the FX market have been rapid, and authorities will take steps in the market if needed. Additionally, Finance Minister Shunichi Suzuki said that rapid FX moves are undesirable and that the government will monitor the market with stronger urgency. This, in turn, provides some support for the JPY against its rivals. 

    On the Euro front, the European Central Bank (ECB) has kept rates steady at a record high since September 2023. However, slowing growth and easing price pressures are fueling speculation about rate cuts, with investors anticipating the first move in April or June. ECB chief economist Philip Lane said on Tuesday that the number and exact timing of rate cuts will depend on how much progress the central bank makes towards its target. 

    ECB Governing Council member Pablo Hernandez de Cos said that the central bank’s new outlook for inflation and economic growth in March will be pivotal in deciding when to start cutting interest rates.  

    Investors will keep an eye on the Eurozone GDP growth numbers for Q4 and December Industrial Production. The stronger-than-expected data could lift the Euro (EUR) and cap the downside of the cross. On Thursday, ECB’s President Christine Lagarde is set to speak. Market players will take cues from the events and find trading opportunities around the EUR/JPY cross. 

     

  • 12.02.2024 04:45
    EUR/JPY retakes 161.00 mark, moves closer to multi-week top touched on Friday
    • EUR/JPY attracts fresh buyers on Monday and moves back closer to last week’s swing high.
    • Dovish BoJ's remarks, along with a positive risk tone, undermine the JPY and offer support.
    • Expectations for an imminent shift in the BoJ’s policy and ECB rate cut bets cap the upside.

    The EUR/JPY cross regains positive traction on the first day of a new week and climbs back above the 161.00 round-figure mark during the Asian session. Spot prices remain well within the striking distance of over a two-week high touched on Friday and seem poised to prolong the recent appreciating move from the vicinity of the 158.00 mark, or the monthly trough.

    Last week's dovish remarks by the Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, saying that aggressive tightening is unlikely even after an exit from negative interest rate policy, continue to undermine the Japanese Yen (JPY). Apart from this, a generally positive risk tone further contributes to safe-haven JPY's relative underperformance and turns out to be another factor lending support to the EUR/JPY cross.

    Expectations that Chinese authorities will do more to stimulate the economy, along with easing fears about a further escalation of geopolitical tensions in the Middle East, remain supportive of the recent risk-on rally across the global equity markets. In fact, the Israel military said on Monday that it had concluded a series of strikes in southern Gaza days after Prime Minister Benjamin Netanyahu rejected a ceasefire proposal from Hamas.

    That said, growing acceptance that the BoJ will eventually abandon its ultra-loose monetary policy settings after the outcome of annual wage negotiations in March should help limit the downside for the JPY. Apart from this, rising bets that the European Central Bank (ECB) will start cutting interest rates at the start of the second quarter might hold back bulls from placing fresh bets around the shared currency and cap the EUR/JPY cross.

    The bets were reaffirmed by a fall in German inflation, which eased to the 3.1% YoY rate in January from the 3.8% in the previous month. Adding to this, ECB Governing Council member Fabio Panetta said on Saturday that the moment is fast approaching for the central bank to cut interest rates. Panetta added that timely and gradual steps could help to reduce ensuing volatility in financial markets and the economy.

    This, in turn, warrants caution before positioning for any further appreciating move in the absence of any relevant market-moving economic releases on Monday. Moving ahead, investors now look to the first estimate of the fourth-quarter GDP growth figures from the Eurozone and Japan, due for release on Wednesday and Thursday, respectively, which, in turn, should provide a fresh impetus to the EUR/JPY cross.

    Technical levels to watch

     

  • 09.02.2024 20:39
    EUR/JPY Price Analysis: Shy of hitting YTD high above 161.00 as doji looms
    • EUR/JPY hits year-to-date high, buoyed by positive sentiment and BoJ dovish comments.
    • Above 161.00, eyes on 162.00 resistance; below 160.27 swing low may test 160.00 support.
    • Technical analysis hints at pullback, with critical supports at 160.00, today’s low 160.77, and pivot 160.46

    The EUR/JPY pierces the 161.00 figure and hits a two-week high of 161.26, courtesy of a risk-on impulse and “dovish” comments by a Bank of Japan (BoJ) member. At the time of writing, the pair hovers around 161.00, clocking minimal 0.05% gains.

    The daily chart portrays the EUR/JPY pair is upward biased. Still, Friday’s price action is shaping a doji, which indicates neither buyer's nor sellers' commitment to their positions. With that said, if buyers reclaim 161.00, look for an upside move to 162.00. On the flip side, if sellers step in and clear the February 5 swing low of 160.27, that could pave the way to challenge 160.00.

    EUR/JPY Price Action – Daily Chart

    In the short term, the divergence between EUR/JPY price action and Relative Strength Index (RSI) studies could open the door for a pullback. The first support is seen at 160.00 the confluence of the Tenkan and Kijun-Sen, followed by today’s low of 160.77, followed by the daily pivot at 160.46.

    EUR/JPY Price Action – Hourly Chart

     

  • 09.02.2024 07:13
    EUR/JPY remains capped below 161.00 following German CPI data
    • EUR/JPY trades weaker near 160.90 in Friday’s early European session. 
    • The German Harmonized Index of Consumer Prices (HICP) rose 3.1% YoY in January, in line with market expectations.
    • The Japanese Yen was further weakened by dovish comments from Bank of Japan (BoJ) policymakers on Thursday.

    The EUR/JPY cross snap a two-day winning streak below the 161.00 psychological mark during the early European session on Friday. The cross attracts some intraday sellers following the German inflation data. Investors await German Buba President Nagel's speech later on Friday for fresh catalysts. At press time, EUR/JPY is trading at 160.90, down 0.02% on the day.

    The latest data from the German statistics office Destatis on Friday showed that the German Harmonized Index of Consumer Prices (HICP) rose 3.1% YoY in January. This figure was in line with market expectations. On a monthly basis, the nation’s HICP dropped 0.2% MoM in January from a 0.2% decline in December. Additionally, the headline Consumer Price Index (CPI) came in at 0.2% MoM and 2.9% YoY in January.

    European Central Bank (ECB) Governing Council member Martins Kazaks said investor hopes for monetary easing at one of the next two meetings might be too aggressive. Kazaks further stated that he will wait until the inflation story is over, and then he will consider rate cuts step by step. Meanwhile, ECB Chief Economist Philip Lane and ECB policymaker Pierre Wunsch said that they prefer to wait for more data before cutting rates.

    On the other hand, the dovish remarks from the Japanese policymakers weigh on the Japanese Yen (JPY) and act as a tailwind for the EUR/JPY cross. The Bank of Japan (BoJ) Deputy Governor Shinichi Uchida said that the central bank will not hike aggressively upon ending negative rates, even after ending its negative interest rate policy. Furthermore, BoJ Governor Kazuo Ueda said on Friday that the possibilities are high for accommodative conditions to stay even if negative rates are abandoned.

    Later on Friday, traders will monitor the Italian Industrial Output and German Buba President Nagel's speech. Next week, the Eurozone and Japan’s Gross Domestic Product (GDP) for the fourth quarter (Q4) will be released. Traders will find trading opportunities around the EUR/JPY cross.

     

  • 08.02.2024 11:10
    EUR/JPY rallies above 160.00 as BoJ Shinichi remains dovish on interest rate outlook
    • EUR/JPY refreshes weekly high near 160.50 on BoJ Shinichi’s dovish commentary.
    • The BoJ may exit from its expansionary policy stance only after the wage cycle heightens.
    • The Eurozone economy might remain stagnant in the fourth quarter of 2023.

    The EUR/JPY prints a fresh weekly high near 160.50 in the European session on Thursday after dovish commentary from Bank of Japan (BoJ) Deputy Governor Uchida Shinichi. BoJ Shinichi said the central bank would be reluctant to raise interest rates aggressively despite exiting the decade-long ultra-dovish monetary policy.

    Uchida Shinichi added that monetary policy conditions in the Japanese economy are in a deep negative trajectory, which is not expected to get blown up aggressively.

    The Japanese Yen has been under pressure as BoJ policymakers run behind the market’s expectations of adopting a neutral stance. Slower wage growth momentum has been limiting hopes of exiting from an easy policy stance, limiting the sustainability of price pressures above 2%. Meanwhile, deepening geopolitical tensions have escalated uncertainty over restrictive policy stance.

    On the Eurozone front, a vulnerable economic outlook has prompted expectations of early rate cuts by the European Central Bank (ECB). ECB policymaker Pablo Hernandez de Cos said this week, "it is already very important for European citizens to know that we are confident the next move will be a cut.” ECB Cos remains confident about inflation declining towards the 2% target.

    On the contrary, the ECB Economic Bulletin released in early London indicated that Governing Council (GC) members will ensure that key rates remain sufficiently restrictive as long as price stability is ensured. Over the economic outlook, GC members anticipate a stagnant performance for the final quarter of 2023.

     

  • 06.02.2024 20:22
    EUR/JPY Price Analysis: Failure at 160.00 paints bearish bias as evening-star emerges
    • EUR/JPY falls as 'evening star' pattern suggests potential reversal.
    • Dip below 160.00 and Tenkan-Sen (159.52) indicates momentum shift; 159.00 next support with further declines might eyeing Ichimoku Cloud top.
    • Recovery above Tenkan-Sen may target 160.00 again, with 161.87 as potential high.

    The EUR/JPY drops from around weekly highs reached on Monday at 160.27 and forms a three-candle ‘evening star’ chart pattern, that opens the door for further losses. At the time of writing, the cross-pair exchanges hands at 159.05, down 0.42%.

    The bullish bias is at risk with the pair sliding below crucial support levels. As sellers pushed the exchange rate below the 160.00 figure and the Tenkan-Sen level at 159.52, the first support emerging is 159.00, followed by the top of the Ichimoku Cloud (Kumo) at 158.73. If those two levels are cleared, the next support emerges at the confluence of a support trendline, the Senkou Span B and the Kijun Sen, at around 158.40/48.

    On the other hand, if EUR/JPY buyers lift the exchange rate towards the Tenkan-Sen, that could open the door to challenge the 160.00 psychological level. A breach of the latter will expose the current year-to-date (YTD) high at 161.87.

    EUR/JPY Price Action – Daily Chart

    EUR/JPY Key Technical Levels

     

  • 06.02.2024 07:09
    EUR/JPY remains on the defensive below 159.70, eyes on Eurozone Retail Sales
    • EUR/JPY edges lower to 159.60 amid the BoJ’s hawkish tilt and safe-haven flows.
    • Investors anticipate the ECB to embark on the first rate cut at the June meeting.
    • BoJ policymakers hinted about the monetary policy shift, which lifts the Japanese Yen. 
    • The Eurozone Retail Sales will be released later on Tuesday. 

    The EUR/JPY cross extends its downside above the mid-159.00s during the early European session on Tuesday. Investors await the December Eurozone Retail Sales for fresh catalysts. Meanwhile, the hawkish tilt from the Bank of Japan (BoJ) and ongoing geopolitical tensions in the Middle East might boost the safe-haven Japanese Yen (JPY) against the Euro (EUR). The cross currently trades near 159.60, losing 0.05% on the day.  

    On Monday, Germany’s Trade Balance rose to €22.2 billion in December from the previous reading of €20.7 billion. German Imports fell 6.7% in the same period versus a 1.5% rise prior and the exports dropped 4.6% in December from a 3.5% rise in November. Furthermore, Germany’s HCOB Composite Purchasing Manager’s Index (PMI) came in at 47.0 versus the expectation and the previous reading of 47.1. Investors continue to expect the ECB to embark on the first rate cut at the June meeting. However, incoming data such as inflation and wage growth will confirm an inflation path of 2%.

    On the Japanese Yen front, the Bank of Japan (BoJ) is preparing to exit negative interest rates by April and overhaul other components of its ultra-loose monetary framework. However, the central bank is likely to go slow on any subsequent policy tightening amid the continuing risks. The hawkish stance from the BoJ could provide some support to the Japanese Yen (JPY) and act as a headwind for the EUR/JPY cross. 

    Traders will focus on Eurozone Retail Sales, which are projected to drop 1.0% MoM and 0.9% YoY in December. Traders will take cues from the figures and find trading opportunities around the EUR/JPY cross. 

     

  • 02.02.2024 21:05
    EUR/JPY Price Analysis: Reclaims 160.00 amid upbeat sentiment
    • EUR/JPY rises to 160.07 amid risk-on mood, US equity gains, surpassing key 160.00 mark.
    • Technical outlook hints at further rise, aiming for January 19 high at 161.81, with 162.00 as next goal.
    • Falling below 160.00 may lead to support retest at Tenkan-Sen, Kijun-Sen, suggesting Ichimoku Cloud consolidation.

    The EUR/JPY edged higher late during Friday’s North American session, with buyers reclaiming the 160.00 figure on a risk-on impulse, as US equities traded with solid gains. At the time of writing the cross-pair exchanges hands at 160.07

    After dipping inside the Ichimoku Cloud (Kumo) and hitting a weekly low of 158.08, the EUR/JPY recovered ground and regained key resistance levels, with buyers clearing the Tenkan-Sen at 159.83, which opened the door toward the 160.00 mark. If buyers achieve a daily close above, that could open the door to challenge the next cycle high at 161.81, the January 19 high. Further upside is seen at 162.00.

    Failure at 160.00 could motivate sellers to drive prices inside the Kumo towards the first support level seen at the Tenkan-Sen, followed by the 159.00 figure, ahead of challenging Kijun-Sen at 158.47.

    EUR/JPY Price Action – Daily Chart

    EUR/JPY Technical Levels

     

  • 02.02.2024 04:02
    EUR/JPY consolidates the recent gains after Eurozone inflation data, hovers around 159.20
    • EUR/JPY struggles to find a direction after a choppy session.
    • The Euro faced a challenge of the possibility of the ECB rate cut in June.
    • Middle East tension might have driven the foreign investments towards the safe-haven JPY.

    EUR/JPY experiences difficulty in establishing a clear direction after a choppy previous day, hovering around 159.20 during the Asian session on Friday. The Euro (EUR) gained upward support following the release of mixed Eurozone inflation data on Thursday, consequently providing a foundation for the EUR/JPY cross.

    In January, the Eurozone preliminary Core Harmonized Index of Consumer Prices (YoY) registered an increase of 3.3%, surpassing the expected 3.2% growth but slightly lower than the prior 3.4%. The annual Consumer Price Index met expectations at 2.8%, consistent with the previous reading of 2.9%. However, the month-over-month report indicated a decline of 0.4%, contrasting with the 0.2% rise observed in December.

    However, the Euro faced a challenge due to the heightened market expectations of an interest rate cut by the European Central Bank (ECB) in June, which could be attributed to the softer preliminary Consumer Price Index (CPI) data from Germany. This, in turn, might have capped the advance of the EUR/JPY cross.

    Moreover, ECB member Mario Centeno has suggested that if inflation continues on its current trajectory in the coming months, the ECB's next probable action would be to cut rates. If such a move materializes, it could signal the beginning of a cycle aimed at the normalization of interest rates.

    The Bank of Japan's (BoJ) hawkish stance has bolstered the Japanese Yen (JPY), finding support amid geopolitical tensions in the Middle East. Escalated tensions have prompted investors to seek the safe-haven qualities of the JPY.

    For the week ending January 26, Foreign Bond Investment in Japan recorded inflows of ¥382.9 billion, a notable increase from the previous week's outflows of ¥-43.5 billion. Additionally, Foreign Investment in Japanese Stocks rebounded during the same week, rising to ¥720.3 billion compared to the previous week's ¥287 billion.

     

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