EUR/JPY flat below the pivot, eyes a 50% mean reversion

EUR/JPY bulls are taking charge following a bearish daily impulse.
The 50% mean reversion level aligns with the prior lows expected to act as resistance.

Ross J Burland FXStreet

EUR/JPY is trading at 133.31 at the time of writing and has stuck to a 133.08 / 133.38 range.

The euro was bid at the end of last week following a sharp drop in the USD and US yields on the back of Nonfarm Payrolls that came in below expectations.

Higher beta crosses, such as EUR/JPY, outperformed as investors pushed out tapering expectations which has weighed on the greenback ahead of Super Thursday that consists of the US Consumer Price Index and the European Central bank.

May inflation numbers in the US may dampen the USD real rate and the ECB may struggle to sound any more dovish amid rising tapering speculation making for a perfect storm for a softer greenback and a firmer EUR.

The week also sees German ZEW investor expectations and German industrial production for April.

In this respect, traders will be on the lookout for signs that the economy is rebounding which could equate to and another leg higher in European bond yields and demand for European stocks.

EUR/JPY technical analysis

The bulls are attempting to correct the prior daily bearish candle.

On the 15-min time frame, the price is creating a bullish structure:

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold holds above $5,000 as bears seem hesitant amid Fed rate cut bets

Gold edges lower at the start of a new week, though it defends the $5,000 psychological mark through the Asian session. The underlying bullish sentiment is seen acting as a headwind for the bullion. However, bets for more rate cuts by the Fed, bolstered by Friday's softer US CPI, keep the US Dollar bulls on the defensive and continue to support the non-yielding yellow metal as the focus now shifts to FOMC Minutes on Wednesday.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.