EUR/JPY recovers following ECB accounts from June’s meeting

EUR/JPY’s bulls gained ground following seven consecutive days of losses and jumped to 154.90.
ECB’s accounts confirmed two additional hikes in 2023.
China’s weak data weights on the JPY.

Patricio Martín FXStreet

On Thursday, the EUR/JPY managed to stop the bleeding following a seven-day losing streak and jumped towards the 154.90 area. The Euro gained traction following the release of the European Central Bank's (ECB) accounts from the June meeting, and the Yen lost ground against most of its rivals amid weak Chinese Trade Balance data.

ECB’s monetary policy accounts showed that most of the Governing Council supported a 25 basis points (bps) hike in June and confirmed that a minimum of two additional increases were needed. In addition, the members “could consider” hiking beyond July if necessary. That being said, the ECB’s tightening expectations remain steady. World Interest Rate Probabilities (WIRP) suggest that a 25 basis points (bps) hike is already priced in for the July meeting, and additional hikes of a quarter of a percentage points rise to 60% and 80% in September and October, respectively. The markets foresee no more hikes following December.

During the early Asian trading hours, China released that its trade surplus rose to $70.62 billion from $65.81 billion in June. In addition, Imports and Exports declined by 6.8% and 12.4% YoY respectively in the same period. The Bank of Japan (BoJ) should monitor its biggest trading partner situation as it could aggravate the local economic downturn.

Japan's currency diplomat Masato Kanda cited that deflationary norms “may be changing” and that the BoJ is closely monitoring the FX markets. It's worth noticing that the JPY had gained ground in the previous session thanks to expectations on a Yield Control Curve (YCC) policy tweak by the BoJ, so any hints of a pivot may contribute to limiting the Yen’s losses.

EUR/JPY Levels to watch

According to the daily chart, the EUR/JPY still holds a negative outlook for the short term. Indicators display weakness, with the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) standing in negative territory. However, on the bigger picture the outlook favors the Euro as it holds above the 100 and 200-day Simple Moving Averages (SMAs)

Support Levels: 153.40, 153.00, 152.50.
Resistance Levels: 155.40, 156.17 (20-day SMA), 157.00.

EUR/JPY Daily chart

EUR/JPY

Overview
Today last price	154.88
Today Daily Change	0.76
Today Daily Change %	0.49
Today daily open	154.12

Trends
Daily SMA20	156.18
Daily SMA50	152.05
Daily SMA100	148.48
Daily SMA200	145.78

Levels
Previous Daily High	154.55
Previous Daily Low	153.43
Previous Weekly High	157.96
Previous Weekly Low	155.38
Previous Monthly High	158
Previous Monthly Low	148.62
Daily Fibonacci 38.2%	153.86
Daily Fibonacci 61.8%	154.12
Daily Pivot Point S1	153.51
Daily Pivot Point S2	152.91
Daily Pivot Point S3	152.4
Daily Pivot Point R1	154.63
Daily Pivot Point R2	155.15
Daily Pivot Point R3	155.75

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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