EURJPY initially reacted heavily to the ECB’s policy meeting overnight, but this didn’t last. While the ECB announced a raft of new measures to combat low inflation, the euro quickly retraced some initial losses and continued to push higher. At the same time, the yen is on the front foot at the moment due to broad USD weakness. The end result is that EURJPY is slightly higher than it was at the close of the Asia session yesterday. The pair, like everything else, is waiting for tonight’s NFP data (exp. 215K; prior 288K).
EURJPY may be protected on the downside
Last night’s policy meeting at the ECB and the response from the euro may suggest that EUR is protected on the downside. EURUSD may have carved out a medium-term floor around 1.3500, which should help support the euro across the board. Meanwhile, the yen is still looking somewhat weak. USDJPY is finding some support around its 100-day SMA and momentum still appears to be to the upside for the pair.
Technical look
From a technical perspective, EURJPY is in a precarious position. It rebounded off its 200-day SMA at the end of last month, but it’s finding some stiff resistance around 140.00. A break here could underscore some underlying technical strength in EURJPY, which is supported by a bullish crossover in daily MACD (see chart).
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