EUR/JPY rises toward 122.00 on the back of a stronger euro

The euro gained momentum late during the American session on the back of comments from ECB’s Nowotny. He spoke about rate hikes and boosted the euro in the market.

 The ECB could also raise the deposit rate earlier than the prime rate - Nowotny

EUR/JPY earlier today dropped to 121.10, after the Bank of Japan meeting. The central bank left monetary policy unchanged. After spending most of the day in a range between 121.25 and 121.80, the pair recently broke to the upside. 

It peaked at 122.02 but so far it has been unable to hold firm on top of the 122.00 handle. After starting the day facing some pressure, EUR/JPY is attempting to end it on a strong note. 

Technical outlook 

“The EUR/JPY pair recovered from a daily low of 121.11, but keeps hovering around 121.40, a major Fibonacci support. The short term picture for the pair favors a new leg lower, given that in the 1 hour chart, technical indicators hover below their mid-lines, unable to re-enter positive territory, whilst the price is stuck around the 200 SMA and well below the 100 SMA”, said Valeria Bednarik, Chief Analyst at FXStreet. 

According to her, the 4-hour chart shows the price above its 100 and 200 simple moving averages, both converging at 120.60, while technical indicators lack directional strength within negative territory.