The EUR/JPY hits a multi-week low on the strong yen. It hit a low of 155.49 and is currently trading around 156.95. Intraday outlook is bearish as long as the resistance 158 holds.
The Bank of Japan (BoJ) is expected to keep hiking interest rates because inflation is showing a trend toward its 2% target. Currently, it stands at 0.5%, the highest in 17 years. According to S&P Global Ratings, the rate might go up to 0.75% by the end of 2025 as inflation keeps on increasing owing to high prices of food and fuel. Changes in the BoJ's leadership tone and expected wage increases are contributing to these rate hike expectations. However, issues like a weak yen, uncertainties surrounding U.S. politics, and low household spending could pose risks to this outlook. Overall, the BoJ is aiming for a healthier economy with rising prices and wages.
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 157.76 a breakout here could lead to targets at 158.51/159.25/160/160.65/161.50/162/163/163.60/164/165/166.65/167.
- Immediate Support: At 156.90– if breached, the pair could fall to 156.65/156/155.
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 158 with a stop loss at 159.25 for a TP of 155.
