EUR/JPY flirting with lows, nearing 131.00 mark ahead of ECB

   •  Traders seemed inclined to lighten their bullish EUR bets.
   •  ECB decision/updated economic projections to set the tone.
   •  Technically seems vulnerable to extend downward trajectory.

The EUR/JPY cross maintained it’s offered tone through the mid-European session and is currently placed at session lows, around the 131.30-25 region.

The shared currency lost some ground on Thursday as traders seemed inclined to lighten their bullish positions heading into today's key event risk - the ECB monetary policy decision. The European Central Bank is universally expected to leave interest rates unchanged and hence, the key focus would be on the updated economic projections. 

Also in focus, commentary on the QE program, expiring in September, and the ECB President Mario Draghi's comments during the post-meeting press-conference should infuse a fresh bout of volatility and provide some meaningful momentum. 

Meanwhile, the prevalent cautious sentiment around European equity markets was seen lending some support to the Japanese Yen's safe-haven demand and further collaborated to the pair's downfall on Thursday. 

From a technical perspective, the pair's inability to build on its recovery move back above the very important 200-day SMA clearly suggests that the recent up-move could be more of a corrective in nature and the downward trajectory might still be far from over. Hence, today price action would set the tone for the next leg of directional move in the near-term. 

Technical levels to watch

A follow-through weakness below the 131.00 handle has the potential to continue dragging the cross further towards 130.25-20 support area en-route the key 130.00 psychological mark.

On the upside, 131.75 area, closely followed by the 132.00 handle, might continue to act as an immediate resistance, above which a bout of short-covering could lift the cross further towards the 133.00 round figure mark.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.


GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 


Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News