EUR/JPY: Cross holding strong around 4 week tops ahead of ECB.

• By Arth Ganatra
• Posted Sep 12, 2019
• 0 Comments

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. With conditions improving on the trade war the safe haven currency Yen has faced selling pressures against its counterparts, with both the superpowers scheduled to meet this October market has been pricing a positive outcome from the meeting which has helped to improve the risk appetite.

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). Apart from ECB earlier during the day, the German Prelim CPI numbers matches the expectations for august giving the Euro a boost but sti focus remains on the ECB as the Central Bank looks to tackle the imminent slowdown in the Eurozone.

Technically, At the moment the cross is advancing 0.19% at 118.93 and faces the next up barrier at 119.12 the monthly high followed by 119.58 and then 119.87. On the other hand, a breach of 117.77 (21-day SMA) would expose 115.86 ahead of 114.85.

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