- The euro hit highs on all fronts after the ECB statement.
- EUR/JPY approaches 129.00 and then loses momentum.
- US data and Lagarde ahead.
The EUR/JPY rose from 128.00 to 128.86, reaching the highest level since March 1 after the release of the European Central Bank (ECB) with its monetary policy decisions.
The ECB as expected kept interest rates unchanged and aims to end the purchase program for the third quarter. This, along with the possibility of an interest rate hike before the end of the year, pushed the euro higher across the market.
“The European Central Bank has just announced how it will reduce QE in the coming months. Net asset purchases will now slow to €20bn a month in June instead of October. Given the risk of stagflation and high uncertainty, this decision gives maximum flexibility to the central bank and keeps open the option of raising rates before the end of the year”, explained the ING analysts.
The volatility in the euro crosses could remain high considering that in minutes the press conference of Christine Lagarde, the president of the ECB, will begin.
EUR/JPY continues in this way with the recovery from the bottom reached near 124.00. To the upside, the cross faces significant resistance in the 128.50 and 129.00 area. The euro needs to consolidate above 129.00 to maintain the expectation of more gains in the short term. In the opposite direction, supports are seen at 127.35 followed by 126.60.
Technical levels
Source: Fx Street
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