All articles tagged with #eurjpy
The article discusses the contrarian trading strategy and its application to three key Japanese yen FX pairs: USD/JPY, EUR/JPY, and GBP/JPY. IG client sentiment data reveals a prevailing bearish sentiment for these pairs, suggesting potential upside from a contrarian perspective. However, the article emphasizes the importance of integrating technical and fundamental analysis with sentiment data to make informed trading decisions.
Japan's top currency official has mentioned the possibility of FX intervention in response to the yen's weakness, with the Finance Minister emphasizing the need for stable currency movements. USD/JPY remains tentative above the crucial 150 mark despite the intervention warnings, while GBP/JPY's breakout is struggling for momentum and EUR/JPY tests a zone of resistance. The potential for FX intervention poses a significant threat to these currency pairs, with technical analysis indicating potential movements based on market reactions.
The Japanese yen experienced significant depreciation against the US dollar and euro after the Bank of Japan (BoJ) maintained its negative interest rates and made only minor adjustments to its yield curve control program. The USD/JPY rose by 1.5% to reach 151.35, its highest level since October 2020, while the EUR/JPY increased by around 1.2% and broke above the 160.00 threshold, reaching its highest point in 15 years. The BoJ's decision to maintain its benchmark rate and adopt a more flexible approach to controlling long-term rates fell short of expectations, leading to the yen's decline. Additionally, news that the Japanese Ministry of Finance had not intervened in the foreign exchange market recently exacerbated the yen's drop.
The Japanese yen's technical outlook against the US dollar, euro, and Australian dollar shows mixed signals. USD/JPY is facing resistance at the psychological 150 mark, but there is no sign of a reversal in the uptrend. EUR/JPY is struggling to extend gains as it is capped by strong resistance, but it continues to hold above key support. AUD/JPY is holding above strong converged support, indicating a broader upward bias, but the path of least resistance remains sideways unless it clears the June high.
The EUR/USD and EUR/JPY trends are expected to be influenced by the monetary policy decisions of the Federal Reserve, European Central Bank (ECB), and Bank of Japan (BoJ) this week. The Fed is expected to raise rates by 25 basis points, while the ECB and BoJ are also anticipated to make rate announcements. The U.S. dollar, euro, and Japanese yen are likely to experience increased volatility as a result. Technical analysis suggests that EUR/USD may face downward pressure, while EUR/JPY could potentially form a bearish reversal pattern.