EURJPY Analysis: Highest Since Fall 2008

FXOpen

Yen Weakening Drivers:
→ rising prices for energy resources. After all, Japan is a major importer.
→ The inflation index CGPI (corporate goods price index) indicates a slowdown in inflation. Therefore, this raises the likelihood that the Bank of Japan will maintain an ultra-loose monetary policy.

The growth of the euro against the yen is facilitated by the fact that the ECB is pursuing a tough policy. Market participants expect that another rate increase could be made in autumn.

The EUR/JPY chart shows that the rate is in an uptrend. The market recovered quickly from the sharp decline on July 27, a testament to the strength of demand. Another piece of evidence is the amount of B→C retracement after A→B rises. It was only about 30% of the momentum.

Support levels:
→ 157.85. After the breakout by the bulls, the previous resistance may provide support, as was the case with the 151.55 level, which worked as a resistance in May, but provided support at the end of June;
→ median channel line.

Resistance Levels:
→ upper border of the channel;
→ the psychological level of 160 yen per euro.

Today (at 15:30 GMT+3) inflation news in the US is expected, which can shake financial markets a lot.

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