FxWirePro- EURJPY Trade Idea

The EUR/JPY declined slightly on board-based yen buying. It hit a low of 157.90 and is currently trading around 158.35. The  intraday outlook is bearish as long as the resistance 160 holds.

Naoki Tamura, BoJ policymaker, has stated that the policy should be kept tight and he believes that rate hikes should cross almost 1% by the end of fiscal year 2025. Recently BoJ increased the key short-term rate to an all-time 17-year peak by raising this rate to 0.5% from 0.25%. Tamamura believes that keeping rates too low will worsen the risks of higher inflation and points to the need for a neutral rate in balancing growth with the control of inflation. After his comments, the Japanese yen strengthened versus the dollar. Analysts predict further rate hikes throughout 2025 as the BoJ exits its old ultra-low policy.

Technical Analysis:

The EUR/JPY pair is trading below the 34,55 EMA and 200-4H EMA in the 4-hour chart.

• Near-Term Resistance: Around 159.20 a breakout here could lead to targets at 160/160.65/161.50/162/163/163.60/164/165/166.65/167.
   
• Immediate Support: At 157.75– if breached, the pair could fall to 157/155.
  
  Indicator Analysis (4-hour chart):
• CCI (50): Bearish
   
• Average Directional Movement Index: Bearish

Overall, the indicators suggest a bearish trend.

Trading Recommendation:

It is good to sell on rallies around 159.28-30 with a stop loss at 160 for a TP of  155.