The EUR/JPY pair saw an increase for the third consecutive day, and traders are hopeful for a positive finish as they look ahead to the weekend. Interestingly, the euro hasn’t fully capitalized on the European Central Bank’s (ECB) optimistic signals regarding interest rates for September, as reported by sources from Bloomberg.
Euro rises as ECB’s firm approach addresses concerns over Bank of Japan intervention
In a recent press conference, ECB President Christine Lagarde discussed the current economic landscape, noting that while inflation risks appear to rise, growth indicators seem less favorable. She emphasized that any monetary policy decisions would be made with the aim of achieving the 2% inflation target over the medium term. There’s a focus on data, and no commitments to a predefined interest rate strategy.
At the same time, the Japanese yen didn’t depreciate as much as anticipated against the euro, as investors remain cautious about potential interventions from the Bank of Japan (BOJ) to support the domestic currency.
On Friday, traders of EUR/JPY will be keeping an eye on Japan’s inflation data. The national CPI, excluding fresh food, is projected to increase from 1.4% to 1.6% year-over-year. Additionally, the preliminary PMI data from Jibun Bank is being watched, with expectations that the manufacturing activity index will dip from 54.8 to 54.5.
In the eurozone, traders will also analyze HCOB flash PMIs from Germany, France, and the broader European Union. The EU HCOB manufacturing PMI is expected to lower from 51.4 to 51.3, while the services PMI may show a slight improvement but still be in contraction at between 49.4 and 49.8.
EUR/JPY Price Forecast: Technical Outlook
Looking at the daily chart of EUR/JPY, the momentum seems to favor upward movement, further supported by an increase in the Relative Strength Index (RSI). The trend line break from last week appears to have shifted the market from sideways movement to an uptrend, indicating moderate price rises.
For the upward movement to continue, EUR/JPY must surpass the April 30 peak of 187.56, after which buyers could target the year-to-date high of 187.95. If we go higher, the key psychological levels at 188.00 and 190.00 loom ahead.
On the downside, if sellers gain momentum, they might disrupt the current market structure. However, this would only happen if the day’s low from Thursday, at 186.05, is breached. Once that level is cleared, attention would likely shift to the confluence of the 50-day and 100-day SMAs around 185.16/02, before potentially targeting the 200-day SMA at 183.44.
EUR/JPY Price Chart – Daily
This week’s Japanese yen price
The table below indicates the percentage changes of the Japanese Yen (JPY) against various major currencies this week. Notably, the yen has shown strength against the Swiss franc.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.43% | 1.03% | 0.92% | 0.48% | -0.03% | 1.08% | 1.01% | |
| EUR | -0.43% | 0.61% | 0.43% | 0.07% | -0.43% | 0.65% | 0.58% | |
| GBP | -1.03% | -0.61% | -0.17% | -0.54% | -1.03% | 0.03% | 0.02% | |
| JPY | -0.92% | -0.43% | 0.17% | -0.36% | -0.90% | 0.11% | 0.20% | |
| CAD | -0.48% | -0.07% | 0.54% | 0.36% | -0.47% | 0.46% | 0.58% | |
| australian dollar | 0.03% | 0.43% | 1.03% | 0.90% | 0.47% | 1.11% | 1.07% | |
| new zealand dollar | -1.08% | -0.65% | -0.03% | -0.11% | -0.46% | -1.11% | -0.02% | |
| swiss franc | -1.01% | -0.58% | -0.02% | -0.20% | -0.58% | -1.07% | 0.02% |
The heat map illustrates percentage changes between main currencies. The base currency can be selected from the left column, while the quote currency is at the top row. For instance, selecting Japanese Yen from the left column and moving to USD along the horizontal line means the percentage change displayed reflects JPY (base)/USD (estimate).
