EUR/JPY: steady but remains below the bearish opening gap ahead of ECB this week

Currently, EUR/JPY is trading at 130.47, down -0.22% on the day, having posted a daily high at 130.74 and low at 130.11.

EUR/JPY has stabilized after the bearish opening gap overnight that came on the back of the latest N.Korean upset that rocked investors at the start of the week. However, attention soon turns back to Central Banks and the ECB meeting this week.

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"Thursday sees the ECB meeting, when We expect the ECB to announce a six-month extension of the Asset Purchase Programme until June 2018, as we see no material benefit in waiting. 

The market is already braced for the announcement of further tapering to be postponed, so there's no reason for this to be overly euro-bearish, but even so, if this over-stretched move high in EUR/USD is ever going to see a meaningful correction and a pause, now seems a good time," explained Kit Juckes, an economist at Societe Generale.

EUR/JPY levels

Analysts at Commerzbank explained that EUR/JPY's formation is developing and has a possible Resistance line at 132.15 megaphone top. " These are a nightmare to trade. Marginal new highs are not sustained and the market swings back into the range - attention is on the 20 day moving average, now at 128.70. Below 128.70 would target the 125.57 August low. There remains scope for 132.24/45 August 2015 low and January 2016 high. Above here would re-introduce the 134.32/61.8% of the move down from 2014," argued the analysts at Commerzbank.