EUR/JPY: Comments from ECB lawmaker, risk-on confront soft Japan data

Knot joins ECB Chief Economist Peter Praet in doubting the ECB’s future monetary policy aims.
Risk-on sentiment challenges the pair’s decline ahead of Eurozone CPI.

Anil Panchal FXStreet

The EUR/JPY pair is taking the bids around 124.60 on early Monday. Comments raising doubts over the ECB’s future monetary policy tightening from the governing council member gained initial attention of the pair traders together with the risk-on sentiment. However, soft data from Japan recently seem in limelight. Traders may concentrate on the Eurozone flash consumer price index (CPI) for fresh impulse.

While market optimism based on prospects of the US-China trade deal helped trigger recent risk-on sentiment, comments from the European Central Bank (ECB) governing council member, Klass Knot, challenged the EUR/JPY ‘s upside.

The US 10-year Treasury yields stretched their recovery from the 15-month low of 2.35% to 2.44%.

The Governor of the Dutch central bank recently conveyed his doubts over the ECB’s future monetary policy tightening. Bloomberg reports that the governing council member seeks a clear reason to consider acting to mitigate the effects of negative interest rates on banks. Knot also raised doubts over tiering is the best way to solve the problem concerning negative rates.

The Euro (EUR) responded negative to the news report but could later-on take advantage of the market risk-on. Traders also considered soft Japanese data as a reason to buy the EUR/JPY pair.

The decline in quarterly release of Tankan large manufacturing index to 12 from 19 prior and 14 expected joined hands with 1.2% growth of large all industry Capex versus 8.0% forecast and 14.3% earlier.

Looking forward, Eurozone CPI and core CPI figures will be important to observe. The Eurozone CPI (YoY) is expected to remain unchanged at 1.5% while CPI Core (YoY) might have softened to 0.9% in March from 1.0% prior.

EUR/JPY Technical Analysis

March 26 high near 125.00, followed by March 21 low near 125.70 and 126.20, are likely nearby resistances for EUR/JPY traders to follow during the quote’s upside.

Meanwhile, 124.00, 123.40 and 122.60 seem adjacent supports to observe in case of the pair’s decline.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD looks offered below 1.1900

EUR/USD keeps its bearish tone unchanged ahead of the opening bell in Asia, returning to the sub-1.1900 region following a firmer tone in the US Dollar. Indeed, the pair reverses two consecutive daily gains amid steady caution ahead of Wednesday’s key US Nonfarm Payrolls release.

GBP/USD slips back to daily lows near 1.3640

GBP/USD drops to daily lows near 1.3640 as sellers push harder and the Greenback extends its rebound in the latter part of Tuesday’s session. Looking ahead, the combination of key US releases, including NFP and CPI, alongside important UK data, should keep the pound firmly in focus over the coming days.

Gold the battle of wills continues with bulls not ready to give up

Gold remains on the defensive and approaches the key $5,000 region per troy ounce on Tuesday, giving back part of its recent two day. The precious metal’s pullback unfolds against a firmer tone in the US Dollar, declining US Treasury yields and steady caution ahead of upcoming key US data releases.

Bitcoin's downtrend caused by ETF redemptions and AI rotation: Wintermute

Bitcoin's (BTC) fall from grace since the October 10 leverage flush has been spearheaded by sustained ETF outflows and a rotation into the AI narrative, according to Wintermute.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.