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15 Sep 2015
EUR/JPY: recovery sunning out of steam before 20 SMA
FXStreet (Guatemala) - EUR/JPY was offered on the back of the BoJ yesterday as they failed to provide a strong signal for further easing.
EUR/JPY has been recovering from the lows of the downside at 135.00, 30 pips above the 200 SMA on the hourly charts and has managed highs just shy of the 20 SMA at 135.69 today.
EUR/JPY offered on BoJ
The BoJ left rates and policy on hold as expected. Analysts at Brown Brothers Harriman explained in summary, "Overall, the BoJ has maintained its' overly optimistic outlook for growth and inflation in Japan. It will disappoint some expectations looking for a more downbeat message today from the BoJ to more accurately reflect the recent loss of growth momentum and increased downside risks from slowing growth in emerging economies. It will prompt a reduction in expectations for further BoJ monetary easing in the near-term that is seen as most likely at the end of October at the earliest. However, if incoming economic data in the months ahead continues to disappoint expectations it could still prompt a shift to looser BoJ policy by year end weighing on the yen."
EUR/JPY downside compelling
Technically, Karen Jones, chief analyst at Commerzbank explained that they continue to view the upside as limited, but loss of 134.80 will be needed to alleviate immediate upside pressure for a slide back to 133.10 and then to the 132.24/131.80 recent low and 61.8% retracement. "We target the 2013-2015 support line at 127.52 currently. Initial support will be the 131.80 then 129.28 Fibonacci retracements of the move seen this year."
EUR/JPY has been recovering from the lows of the downside at 135.00, 30 pips above the 200 SMA on the hourly charts and has managed highs just shy of the 20 SMA at 135.69 today.
EUR/JPY offered on BoJ
The BoJ left rates and policy on hold as expected. Analysts at Brown Brothers Harriman explained in summary, "Overall, the BoJ has maintained its' overly optimistic outlook for growth and inflation in Japan. It will disappoint some expectations looking for a more downbeat message today from the BoJ to more accurately reflect the recent loss of growth momentum and increased downside risks from slowing growth in emerging economies. It will prompt a reduction in expectations for further BoJ monetary easing in the near-term that is seen as most likely at the end of October at the earliest. However, if incoming economic data in the months ahead continues to disappoint expectations it could still prompt a shift to looser BoJ policy by year end weighing on the yen."
EUR/JPY downside compelling
Technically, Karen Jones, chief analyst at Commerzbank explained that they continue to view the upside as limited, but loss of 134.80 will be needed to alleviate immediate upside pressure for a slide back to 133.10 and then to the 132.24/131.80 recent low and 61.8% retracement. "We target the 2013-2015 support line at 127.52 currently. Initial support will be the 131.80 then 129.28 Fibonacci retracements of the move seen this year."