•  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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures