EUR/JPY chart on Trading View used for analysis
- EUR/JPY trades 0.27% lower on the day at 124.30 at 0600 GMT, bias bearish.
- The pair is extending weakness after rejection at 20-DMA, slips below 5-DMA.
- Price action has broken below 1H 200-SMA support at 124.38 and is on track to test 61.8% Fib at 124 mark.
- The European Central Bank and the Bank of Japan will hold their first policy meetings of 2019 amid concerns of a global downturn.
- Flash PMIs out of the Eurozone will also be watched for the latest glimpse on the growth picture.
- Slowdown in the Eurozone economy could force the ECB to delay rate hikes and rising odds of rate hike delay could keep the EUR under pressure.
- The central bank is seen raising its deposit rate, currently at -0.40%, to -0.20% in Q4 and would wait until early 2020 to raise its refinancing rate from zero to 0.20%.
- The BoJ is widely anticipated to keep its stimulus program unchanged. However, there is speculation the Bank will revise down its inflation forecasts.
- Technical studies are not conclusive. Focus on ECB and BoJ policy meetings for further impetus.
Support levels - 124 (61.8% Fib), 123.40 (Jan 15 low), 123
Resistance levels - 124.38 (200-DMA), 124.71 (20-DMA), 125.06 (21-EMA)
For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
