EUR/JPY reversed its course following ECB’s hike and YCC Tweak prospects

EUR/JPY fell to its lowest point since mid-june seeing more than 1.30% losses falling below 154.00.
ECB hiked by 25 bps, but Christine Lagarde didn’t commit to a hike in September.
All eyes are now on BoJ’s decision on Friday. Reports suggest that the bank will consider a policy pivot.

Patricio Martín FXStreet

The EUR/JPY cross tallied a fourth consecutive day of losses, weakened by Christine Lagarde’s neutral stance following the European Central Bank (ECB) decision to hike rates by 0.25% as expected. The Euro is seeing losses agains most of its rivals, including the JPY, while investors await the Bank of Japan (BoJ) decision early in the Asian session on Friday.

When asked if the bank had more ground to cover, Lagarde stated, “At this point, I wouldn't say so”. In addition, regarding the September decision, she confirmed that it would depend on the economy's evolution and inflation. She also added that the Council would not use forward guidance and would have the choice of raising or maintaining interest rates.

On the Japanese side, markets await the BoJ to maintain its dovish stance in Friday’s meeting. However, Nikkei reported on Thursday that the bank would consider keeping a rate ceiling but allow moderate rises beyond that level, which gave the JPY a significant boost. In addition, investors will eye the updated macro projections to continue modelling their expectations regarding the bank’s next steps.

EUR/JPY Levels to watch

According to the daily chart, the technical outlook is bearish. The Relative Strength Index (RSI) fell into negative territory, while the Moving Average Convergence Divergence (MACD) prints higher red bars indicating that the bears are in command.

Support levels: 153.00, 151.00, 150.00

Resistance levels: 156.00 (20-day Simple Moving Average), 157.00, 157.50.

EUR/JPY Daily chart

EUR/JPY

Overview
Today last price	153.26
Today Daily Change	-2.21
Today Daily Change %	-1.42
Today daily open	155.47

Trends
Daily SMA20	156.2
Daily SMA50	153.65
Daily SMA100	149.63
Daily SMA200	146.39

Levels
Previous Daily High	155.99
Previous Daily Low	155.15
Previous Weekly High	158.05
Previous Weekly Low	154.88
Previous Monthly High	158
Previous Monthly Low	148.62
Daily Fibonacci 38.2%	155.47
Daily Fibonacci 61.8%	155.67
Daily Pivot Point S1	155.08
Daily Pivot Point S2	154.69
Daily Pivot Point S3	154.24
Daily Pivot Point R1	155.93
Daily Pivot Point R2	156.38
Daily Pivot Point R3	156.77

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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