- EUR/JPY spiked above last month's resistance at 125.00 post ECB meeting yesterday.
- The pair has also broken above 126 resistance and we see scope for upside till 128 levels.
- Extremely volatility seen post ECB event, where EUR initially plunged after the central bank aggressively unveiled more stimulus.
- Draghi's presser triggered a quick reversal rally as markets repriced forward outlook on interest rate differentials, after Draghi's announcements in the presser.
- Draghi stated that the ECB cannot cut rates as low as they want and squashed expectations over negative interest rates policy.
- BoJ meeting next week is expected to be a non-event, the central bank is likely to stay pat.
- Technicals for the pair are bullish, momentum is higher, we see scope for test of 129 levels.
- Bullish invalidation only below 123 levels.
Recommendation: Good to buy dips around 126.40, SL: 125.30, TP: 127.40/128