FxWirePro: Euro likely to slide back to test 120 area against yen

The euro has been consolidating against the yen in the range of 300 pips since early December. While the key immediate support area lies around 121, at the base of the range, the single currency might actually slide towards 120 area and at that point, if the euro bulls fail to trigger big buying, it is likely that the euro would decline a lot more against the traditional safe haven currency.

A lot would depend on the actions by the European Central Bank (ECB), which is scheduled to announce its monetary policy on 9th of March from Frankfurt. The recent increase in inflation rate has sparked a debate within the Eurozone, whether the ECB should cut down its commitment to purchase another €540 billion worth of bonds once the current program expires in March this year. A fresh wave of German criticism has hit the central bank hard, which is set to increase if the higher inflation rate continues.