The EUR/JPY consolidating in a narrow range ahead of ECB monetary policy. It hit a low of 162.90 yesterday and is currently trading around 163.65. The intraday outlook is bullish as long as the support of 162.75 holds.
With a 25-basis-point reduction to its deposit rate expected by the European Central Bank (ECB), it will drop to 2.00%. Slowing Eurozone inflation, which fell to 1.9% in May, and a poor growth outlook with staff predictions for 2025 GDP growth at only 0.9% drive this decision. Especially new US tariffs on European products, which President Lagarde cautioned could reduce the already small growth of the Eurozone this year, the ECB is also concerned about the consequences of worldwide trade conflicts.
Technical Analysis:
The EUR/JPY pair is trading below 55 EMA, 200 and above 365-H EMA on the 4-hour chart.
- Near-Term Resistance: Around 164.20 a breakout here could lead to targets at 165/166/166.65/167.
- Immediate Support: At 163.40 if breached, the pair could fall to 163/162.75/162/161.49/160.50/160/ 159.25/158.85/158.25.
Indicator Analysis 4-hour chart):
- CCI (50): Neutral
- Average Directional Movement Index: Neutral
Overall, the indicators suggest mixed trend
Trading Recommendation:
It is good to buy on dips around 163 with stop loss at 162 for a TP of 166.50.
