EUR/JPY Analysis: New High of the Year

FXOpen

For the first time since 2008, the rate exceeded the level of 161 yen per euro.

The strength of the euro and the weakness of the yen are contributed to by different policies of central banks.

The European Central Bank's chief economist said on Wednesday that he had not seen enough progress in curbing inflation. This may mean a continuation of the ECB's tight monetary policy and the “expensive euro”. The head of Ireland's central bank said on Wednesday that further interest rate hikes should not be ruled out, while the Bundesbank president said the "last mile" to the inflation target could be the hardest.

At the same time, in Japan, interest rates are effectively negative, making the yen fundamentally weak against the euro. The uptrend channel on the EUR/JPY pair (shown in blue) dates back to 2022. The stability of the trend is also evidenced by the upward-directed MA (100) — the rate is stably above it.

Wherein:
→ the psychological level of 160 yen worked as an important resistance in 2023, but in November the price consolidates higher;
→ yesterday, the bulls broke through the level of 161 yen per euro;
→ The RSI rises into the overbought zone, making the market vulnerable to a pullback.

At the same time, it is acceptable to assume that the yen may strengthen as a result of statements by representatives of the Japanese authorities (former or even current) about changing the monetary policy. As such, signals are increasingly broadcast through the media, 2024 could be the period when the yen situation changes from verbal interventions to real actions (including rate hikes).

Taking into account the above, one should not exclude the scenario of a return to the level of 160 yen per dollar, especially taking into account the fact that this level was not clearly tested after the bullish breakout.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

forex

Forex Trading with FXOpen

Forex Trading with FXOpen

Experience ECN technology for deep liquidity and light-speed trade execution

  • Access over 50 markets
  • Trade with spreads from 0.0 pips
  • Take advantage of commissions from $1.50/lot
Learn more

Latest articles

Forex Analysis

EUR/USD Breaks 2023 Low

Today’s PMI figures were released and came in worse than analysts’ expectations. The Flash Manufacturing PMI and Flash Services PMI for both Germany and France fell below the 50.0 threshold, indicating that Europe’s economy is slowing down.

Shares

Alphabet Inc. (GOOGL) Shares Drop Over 4.5% in a Single Day

As the chart shows, during yesterday’s trading session, the stock price of Alphabet Inc. (GOOGL), the parent company of Google, declined by more than 4.5%. The drop was driven by regulatory pressure on the company concerning its Chrome

Forex Analysis

Dollar Resumes Gains Amid Weak Rivals and Fresh Economic Data

After a brief correction, the US dollar is back on an upward trajectory. The GBP/USD pair has fallen to 1.2600, USD/CAD has bounced from 1.3940 and is heading towards 1.4000, while EUR/USD is approaching

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.