Home EUR/JPY: On the bids as traders brace for the key day, ECB on the driver’s seat
FXStreet News

EUR/JPY: On the bids as traders brace for the key day, ECB on the driver’s seat

  • EUR/JPY holds on to recovery gains as downbeat Japanese PMI join the EUR strength.
  • Japan’s performance indicators to offer immediate direction, EU/German PMIs could drive markets afterward.
  • All eyes on Mario Draghi’s last appearance as the ECB President.

Not only likely recovery in the Eurozone/German PMIs but expectedly upbeat remarks from the ECB President favor the EUR/JPY to remain strong around 121.00 during early Thursday.

In addition to downbeat activity numbers from Australia and Japan, pessimism surrounding Singapore, South Korea and Malaysia helped the Japanese Yen (JPY) to remain strong against the majority of its counterparts except the Euro (EUR).

The regional currency seems to have gained traction as investors expect a positive day ahead filled with key data/events.

While the re-introduction of the Quantitative Easing (QE) and few other monetary easing measures closes the door of any policy change during today’s European Central Bank (ECB) policy meeting, investors will closely observe what Mario Draghi has to say when he bids adieu to the bank. Further, the Purchasing Manager Index (PMI) numbers for Eurozone and Germany are likely to have improved. “The advance October Markit manufacturing and services PMIs for France, Germany and the Eurozone are due in the London morning, providing some timely data for the ECB meeting. The final September Eurozone readings were 45.7 on manufacturing, 51.6 on services, with France holding above 50 but German factories notably weak, at 41.7. Consensus is for a small improvement,” says Westpac.

Japan’s August month Leading Index and Coincident Index could provide immediate direction. Forecasts suggest no change in 91.7 and 99.3 figures respectively.

On the political front, the European Union (EU) is likely to deliver its verdict on the Brexit deadline with Goldman Sachs expecting 3-4 weeks of technical stretch rather than allowing a three-month delay from October 31.

Technical Analysis

Monthly top surrounding 121.50 and 200-day Exponential Moving Average (EMA) level near 121.90 can keep prices under check. Meanwhile, a downside below 120.40 can recall 120.00.

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.