The EUR/JPY struggles to close above 160 despite a strong Euro. It hit a low of 158.90 and is currently trading around 158.921. The intraday outlook is bearish as long as the resistance of 160.25 holds.
The euro can strengthen by 5% based on a ceasefire agreement in Ukraine and the resumption of gas supplies, restoring optimism in the markets. Expectations regarding potential peace talks have helped to sustain the performance of the euro generally.
A pause in hostilities would relieve energy price tensions and propel total investment inflows into the European market, enhancing its economic outlook. Successful completion of peace talks and the imposition of a ceasefire would alleviate geopolitical risks, rendering the Eurozone more attractive for capital.
The euro has already posted a recovery against the United States dollar on hopes of successful peace talks and delay of reciprocal tariffs by the United States. These developments have raised hopes of easing inflation pressures and hence boosted the relative strength of the euro
Technical Analysis:
The EUR/JPY pair is trading above the 34,55 EMA and 200-4H EMA in the 4-hour chart.
- Near-Term Resistance: Around 159.30 a breakout here could lead to targets at 160.25/161/161.50/162/163/163.60/164/165/166.65/167
- Immediate Support: At 158.80– if breached, the pair could fall to 158/157/156.25.
Indicator Analysis (4-hour chart):
- CCI (50): Bullish
- Average Directional Movement Index: Neutral
Overall, the indicators suggest a mixed trend
Trading Recommendation:
It is good to sell on rallies around 160 with stop loss at 161.20 for a TP of 157.75.
