EUR/JPY recovers from three-year lows on Merkel’s comments
|- Euro rises as German Chancellor Merkel talks about a “huge” package.
- Yen also weakens after BoJ considers removing the limit on purchase program.
The EUR/JPY dropped earlier on Thursday to 115.72, the lowest intraday level since April 2017 before bouncing sharply back above 116.00. The euro jumped across the board, and EUR/JPY spiked to 116.80. As of writing, it trades at 116.40/50, modestly lower for the day.
According to Bloomberg, German Chancellor Merkel will tell European Union leaders that the coronavirus economic response package must be “huge." Her comments boosted the euro that erased most of its losses.
Previously, a report mentioning that the Bank of Japan will consider removing the limit out of the bond-buying program triggered a decline of the yen.
Technical outlook
Despite moving off lows, the bearish pressure in EUR/JPY remains in place. A daily close below 116.00 would point to further losses. On the upside, a recovery north of 117.00 would alleviate the pressure. The next resistance is seen at 117.50. The positive for the euro so far on Thursday is that it has been able to rebound rising back above the 2019 low (115.80).
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