EUR/JPY hits fresh 1-week lows and rebound post-ECB, focus shifts to Draghi’s presser

   “¢   As was widely expected, ECB maintains status-quo and leave policy rates unchanged.
   “¢   ECB changes rate guidance and now sees rates on hold at least through this year.
   “¢   Introduction of new TLTRO exerts some additional downward pressure on the EUR.

The EUR/JPY cross failed to capitalize on the attempted intraday bounce to 126.45 area and dropped to fresh one-week lows post-ECB announcement.

The shared currency lost some ground after the European Central Bank Governing Council, at its March meeting, changed its interest rate guidance and now sees rates to remain on hold at least through 2019. This coupled with the introduction of a new series of targeted longer-term loans – TLTROs, exerted some additional downward pressure on the common currency.  

The downside, however, remained limited as the focus now shift to the updated economic projection and the post-meeting press conference, wherein comments by the ECB President Mario Draghi might influence sentiment surrounding the common currency and infuse a bout of volatility across EUR pairs.

Meanwhile, the prevalent cautious mood, as depicted by a weaker tone around equity markets, continued underpinning the Japanese Yen’s safe-haven status and might turn out to be one of the key factors keeping a lid on any attempted recovery move for the cross.  

Technical levels to watch