- The EUR/JPY loses traction around 164.40 in the early European session on Wednesday.
- The positive perspective of the cross prevails above the 100 -day key EMA with the RSI Alcista indicator.
- The first Alcista barrier arises in 165.00; The first level of support to watch is 163.51.
The EUR/JPY crossing attracts some sellers around 164.40 during the early European session on Wednesday. The Japanese Yen (JPY) is strengthened in front of the euro (EUR) in the middle of the perspectives of a greater normalization of the policy by the Bank of Japan (Boj). The harmonized consumer pricing index (HICP) of Germany will be at the Center for Care later on Wednesday.
Technically, the constructive perspective of the EUR/JPY is maintained since the crossing is well backed above the 100 -day exponential mobile average (EMA) in the daily chart. The bullish impulse is reinforced by the 14 -day relative force (RSI) index, which is located above the midline about 58.30, showing an upward impulse in the short term.
On the positive side, the key resistance level for the crossing arises in 165.00, representing the upper limit of the Bollinger band and the psychological level. A decisive rupture above this level could gain more impulse and point to 166.00, the round level and the maximum of November 7, 2024. More to the north, the following obstacle is observed in 166.60, the maximum of October 30, 2024.
In the bearish case, the minimum of May 12 in 163.51 acts as an initial support level for the EUR/JPY. A rupture of this level could drag at the crossroads around 161.80, the 100 -day EMA. The additional filter to the decline is the psychological level of 160.00.
EUR/JPY DAILY GRAPH
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
