EUR / JPY falls to test weekly lows ahead of ECB

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  • EUR / JPY with a bearish bias, manages to sustain above 131.50 / 55.
  • Market awaiting the decision of the ECB and US data.

EUR / JPY is losing ground again but manages to hold above the weekly low set on Wednesday at 131.55. The cross shows low volatility, in the lead up to important events, which include the European Central Bank.

Waiting for the ECB with weakness

The euro it is falling for the fifth time in the last six days, retreating from its four-month high of 133.45 last week. For now, the 131.50 support remains firm, the break of it would expose the 20-day average at 131.15. To the upside, a close above 132.50 could give the euro some strength again.

The focus is on the European Central Bank (BCE) that in less than an hour will announce its decisions. No concrete measures are expected. Analysts at TD Securities expect “words and not actions.” Decisions regarding purchase schedules will be made in December.

A fact that will be known before ECB It is Germany’s inflation rate, which could climb to 4.5% (annually), a record level.

Hours ago the meeting of the Bank of Japan (BoJ), which did not have an impact on the market. Policies were left unchanged, with the benchmark rates at -0.1% and the 10-year rate target at 0%. The monetary authority lowered growth estimates from 3.8% to 3.4% and core inflation estimates from 0.6% to 0% for fiscal year 2021. The BoJ maintained a cautious tone regarding projections and continues to see inflation as transitory .

The yen it continues to be among the best performing currencies for these sessions, supported by the decline in equity markets and in certain sections of the yield curve of Treasury bonds.

Technical levels

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