FxWirePro: EUR/JPY outlook – forming key support

Euro is forming a key base against Yen over the past few days and Euro isn't such a bad performer against Pound and Yen, compared to Dollar. As a matter of fact, Euro was able to close positive against Pound last week and Euro is up against both today.

Though European Central Bank (ECB) hinted that it might tweak monetary policy further towards expansion last week and market is pricing at least another 10 basis points rate cut and Bank of Japan (BOJ) stayed away from further easing sighting moderate economy and oil to be responsible behind lowflation - European data is much better coming that of Japan's.

Latest report shows wage growth edged up in Japan by only slightly at 0.6% and Japan's economic engine is not firing at the pace that of Euro zone economies'.

However, it is more likely than not the ECB will ease well ahead of Japan (assuming BOJ eases further) and Euro will drop heading into December meeting of ECB, but for the time being Euro seems to have formed a key base around 131.5 area.

Euro is currently trading at 133.1 against Yen and further upside likely if its clears resistance around 133.5.