EUR/JPY Braces for ECB Decision: Bulls Eye Opportunity Amidst Trade War Fears

The EUR/JPY consolidating in a narrow range ahead of ECB monetary policy. It hit a low of 162.90 yesterday and is currently trading around 163.65. The intraday outlook is bullish as long as the support of 162.75 holds.

With a 25-basis-point reduction to its deposit rate expected by the European Central Bank (ECB), it will drop to 2.00%. Slowing Eurozone inflation, which fell to 1.9% in May, and a poor growth outlook with staff predictions for 2025 GDP growth at only 0.9% drive this decision. Especially new US tariffs on European products, which President Lagarde cautioned could reduce the already small growth of the Eurozone this year, the ECB is also concerned about the consequences of worldwide trade conflicts.

Technical Analysis:

The EUR/JPY pair is trading below  55 EMA,    200 and  above 365-H EMA  on the 4-hour  chart.

1. Near-Term Resistance: Around 164.20  a breakout here could lead to targets at 165/166/166.65/167.
2. Immediate Support: At 163.40 if breached, the pair could fall to  163/162.75/162/161.49/160.50/160/  159.25/158.85/158.25.
   
   Indicator Analysis 4-hour chart):

1. CCI (50): Neutral
2. Average Directional Movement Index: Neutral

Overall, the indicators suggest mixed trend

Trading Recommendation:

It is good to buy on dips around 163 with stop loss at 162 for a TP of 166.50.