EUR/JPY rises after 3-day slide as yen losses strength
- Spot rebounded from 1-month lows.
- A slide of the yen boosted the pair.
- Price still below 20 SMA and still near monthly lows.
The EUR/JPY pair rose on Tuesday and climbed above Monday’s highs, removing some short-term bearish pressure. It still remains near monthly lows. It peaked
JPY after BoJ and US data
Earlier today, the Bank of Japan concluded its 2-day monetary policy meeting and announced no changes. It kept rates at -10bps and the 10-yr JGB yield target at 0.00%. The yen remained steady and continued that way after BoJ Governor Kuroda press conference. He said that the economy was expanding at a moderate pace and they would keep the current stance of monetary easing until inflation accelerates toward the 2% target rate.
The Japanese currency started to decline during the European session and dropped further following the release of US data that revealed that the Employment Cost Index increased by 0.7% in Q3 above consensus of 0.6%.
US: Employment costs expected to pick up further - Wells Fargo
On Wednesday, economic data includes the Nikkei Manufacturing PMI for October in Japan and in the US the ADP private employment report and the ISM and PMI Manufacturing Index. Also, the Federal Reserve will announce its decision on monetary policy. No change is expected. Market participants will look into the statement for clues about the December meeting.
EUR/JPY levels to watch
The pair held above the 6-week low it reached on Monday at 131.44 and bounced to the upside. It peaked 132.56, a 2-day high. Near the end of the day it was hovering around 132.40/50, consolidating gains.
EUR/JPY rose above the 20 SMA in the 4 hours chart (132.15), improving the short-term outlook for the euro. To the upside, above 131.60 the next resistance is 132.90/95. On the downside, the key area continues to be 131.45/65: a consolidation below would be a negative development from a technical perspective for the pair, exposing the next supports at 131.10 and 130.65 (Set 1 low).