EUR/JPY – Rejected at 50-DMA

EUR/JPY pair’s rejection at 50-DMA level of 114.18 in early Asia was followed by an increase in demand for Yen after BOJ governor Kuroda’s hawkish comments in parliament hit the wires.

Tests 10-DMA support

The selling appears to have stalled around 10-DMA support of 113.70. BOJ’s Kuroda played down necessity to do more easing in the short-term, thus squashing hopes of any surprise next week. Furthermore, he added that yield curve is behaving as expected by the bank and he does not intend to push down long-term yields even if they do rise further.

The resulting uptick in Yen added to the bearish pressure around the cross, which was already under pressure to Euro’s retreat againt the American dollar. The cross was last seen trading around 113.77 levels.

EUR/JPY Technical Levels

Breach of support at 113.70 (10-DMA) would open doors for 5-DMA support of 113.51. A violation there could signal end of the corrective move from the low of 112.61 (Oct 21 low) and expose 113.00 (zero figure). On the higher side, 50-DMA of 114.18 is a key resistance given the corrective move from 112.61 stalled at the moving average. If breached, preferably on daily closing basis cross could target the downward sloping 100-DMA seen today at 114.67. A violation there would expose 115.00 (zero figure).