EUR/JPY unfazed around 130.40 post-ECB

Haresh Menghani FXStreet

The EUR/JPY cross trimmed some of its early gains and retreated back below mid-130.00s post ECB announcement.

The shared currency lost some ground after the ECB, on expected lines, left interest rates unchanged at today’s meeting and reiterated that QE would continue until end of December or beyond, if outlook worsens.

The ECB policy statement also revealed that the central bank foresee rates at present level well past end of QE and did little to provide any fresh bullish impetus.

Meanwhile, continuous improvement in investors' risk appetite, as depicted by strong rally across European equity markets, was seen weighing on the Japanese Yen's safe-haven appeal and remained supportive of the bid tone surrounding the cross.

The movement, however, seemed lacking strong conviction as the key focus remains on the post-meeting presser, where any comments over the shared currency's recent strength and (or) clues over the timeline for tapering should infuse a fresh bout of volatility across Euro pairs.

• ECB’s Draghi press conference - Live

Technical levels to watch

A strong follow through buying interest beyond 130.70 level has the potential to lift the cross beyond the 131.00 handle towards a major horizontal resistance near the 131.40-50 region.

On the flip side, the key 130.00 psychological mark now seems to protect immediate downside, which if broken could drag the cross back towards 129.35 level with some intermediate support near 129.60 area.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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