The EUR/JPY pared some of its gains on the weak Euro.It hit a high of 160.07 yesterday and currently trading around 159.54. The bearish intraday outlook is maintained as long as the resistance at 160.35 holds.
As of December 2024, the European Central Bank (ECB) is taking a dovish approach, having cut its key interest rate by 25 basis points to 3.00%, reflecting concerns over a weak Eurozone economy. The ECB is also lowering its inflation and growth forecasts, indicating a willingness to continue easing policies into 2025. In contrast, the Federal Reserve (Fed) is more cautious about rate cuts due to strong job reports and ongoing inflation, with a high probability of a small cut expected. The difference in monetary policies is likely to impact currency values, possibly weakening the euro against the dollar. Investors are closely watching these trends as they could affect economic conditions and markets in both regions.
Technical Analysis:
The EUR/JPY pair is trading above the 55 EMA and below 34 EMA as well as the 365 Hull moving average on the 4-hour chart.
- Near-Term Resistance: Around 160.80– a breakout here could lead to targets at 161, 161.75, 162, 163, and 164.18.
- Immediate Support: At 159.50 – if breached, the pair could fall to 159/158.35/157.55/156.95/156.40/155.51.
Indicator Analysis (4-hour chart):
- CCI (50): Neutral
- Average Directional Movement Index: Neutral
Overall, the indicators suggest a mixed trend.
Trading Recommendation:
Consider buy on dips around 160, with a stop loss at 159, targeting take profit levels at 162.
