EUR/JPY looks firm around 119.00 ahead of ECB

EUR/JPY moves to the 119.00 neighbourhood on Thursday.
EMU Industrial Production disappoints once again.
ECB event next of relevance. US releases its CPI figures.

Pablo Piovano FXStreet

The rebound in the demand for the single currency has given some extra legs to EUR/JPY, lifting it to the 119.00 area and above.

EUR/JPY in 4-week tops

The recent improvement in the risk-associated complex has been adding selling pressure to the Japanese safe haven and bolstering the up move in the cross for the second week in a row, also helped by the somewhat steady mood in EUR.

The moderate rebound in US yields has also propped up the renewed selling bias in JPY, which clinched fresh lows vs. both EUR and USD.

Later in the session, the recovery in the cross will be surely put to the test in light of the ECB event. It is worth recalling that the central bank is expected to unveil a package of looser monetary conditions, which could include interest rate cuts, a tiered deposit rate scheme and even another wave of ‘quantitative easing’ (QE).

Earlier in the day, German final CPI figures for the month of August matched the preliminary prints (-0.2% MoM, 1.4% YoY), while July’s Industrial Production in the broader Euroland missed consensus and contracted more than forecasted.

EUR/JPY relevant levels

At the moment the cross is advancing 0.19% at 118.93 and faces the next up barrier at 119.12 (monthly high Sep.12) seconded by 119.58 (high Aug.13) and then 119.87 (high Aug.6). On the other hand, a breach of 117.77 (21-day SMA) would expose 115.86 (2019 low Sep.3) ahead of 114.85 (2017 low Apr.17).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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