EUR/JPY Analysis: Bullish Momentum Supported by ECB-BoJ Policy

אתמול

The EUR/JPY pair currently shows potential for upward movement, supported primarily by the ongoing divergence in monetary policies between the European Central Bank (ECB) and the Bank of Japan (BoJ).

The ECB's hawkish stance, involving rate hikes to manage inflation, contrasts sharply with the BoJ's ongoing zero-interest-rate policy and quantitative easing. This divergence has historically supported the Euro's appreciation against the Yen, as investors favor higher-yielding currencies.

Technical Analysis Insights:

Trend Indicators: The overall trend indicators, including moving averages, lean bullish on higher time frames. Shorter-term moving averages confirm the upward momentum, aligning with the macroeconomic outlook favoring the Euro.

Oscillators: Most oscillators currently show neutrality, with some indicating a buy, suggesting that while momentum remains positive, the pair could experience periods of consolidation​.

Resistance and Support Levels:

Key resistance is identified near recent highs, while support rests around significant moving average levels and prior swing lows. This setup suggests that, although the current momentum is upward, any risk sentiment shift or unforeseen economic events could lead to volatility, impacting the upward trend.

Prediction

Given these indicators and the fundamental backdrop, the EUR/JPY is likely to maintain a gradual bullish trend in the short to medium term, with potential fluctuations depending on global economic factors and any shifts in the ECB or BoJ's policy stance.

Note: There is an OPEN GAP at lower levels.

Disclaimer: This analysis is for informational purposes only and should not be taken as financial advice. Always consider your risk tolerance and consult with a financial advisor before making trading decisions.