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4 Apr 2014
EUR/JPY offered on a dovish ECB
FXStreet (Guatemala) - EUR/JPY is trading at 142.56, down -0.02% on the day, having posted a daily high at 142.63 and low at 142.54.
EUR/JPY tells the story of how the ECB went really. EUR/JPY moved south of 143.00 when a dovish ECB put prospects for future rate increases way, way, way into the distance. The pair takes on new territory between 142.40/60 currently and is subdued here without there being anything left from the calendar today ahead of Nonfarm Payrolls.
RBS strategists explained that the Council left the key ECB rates unchanged, as expected, despite the fact that inflation once again surprised to the downside and now stands at a mere 0.5%. “Last month the Council was unhappy with the market reaction to the decision to leave rates on hold and the press conference. The communication strategy this month seemed designed with the single purpose of avoiding a repeat performance”.
ECB to cut rates?
The strategists at RBS warned that the Council could still cut rates if the outlook deteriorates, and in theory an asset purchase programme could follow too. “But our best guess is that the data will not force the Council's hand. Instead, the Council will go into hibernation given the large negative output gap: rate hikes are far, far in the future”.
Daily RSI sits at 61.73, in neutral territory
Looking to momentum indicators, the hourly 200 SMA is currently at 142.96, up from the last close at 141.75 and climbing. Over the past 20 days, the exponential average closing price is 141.58, and trending higher.
EUR/JPY Levels
Current price is 142.57, with resistance ahead at 142.58 (Daily Open), 142.63 (Daily High), 142.66 (Daily Classic S1), 142.76 (Hourly 20 EMA) and 143.02 (Weekly High). Next support to the downside can be found at 142.54 (Hourly 100 SMA), 142.54 (Daily Low), 142.30 (Daily Classic S2), 142.30 (Yesterday's Low) and 142.23 (Weekly Classic R1).
EUR/JPY tells the story of how the ECB went really. EUR/JPY moved south of 143.00 when a dovish ECB put prospects for future rate increases way, way, way into the distance. The pair takes on new territory between 142.40/60 currently and is subdued here without there being anything left from the calendar today ahead of Nonfarm Payrolls.
RBS strategists explained that the Council left the key ECB rates unchanged, as expected, despite the fact that inflation once again surprised to the downside and now stands at a mere 0.5%. “Last month the Council was unhappy with the market reaction to the decision to leave rates on hold and the press conference. The communication strategy this month seemed designed with the single purpose of avoiding a repeat performance”.
ECB to cut rates?
The strategists at RBS warned that the Council could still cut rates if the outlook deteriorates, and in theory an asset purchase programme could follow too. “But our best guess is that the data will not force the Council's hand. Instead, the Council will go into hibernation given the large negative output gap: rate hikes are far, far in the future”.
Daily RSI sits at 61.73, in neutral territory
Looking to momentum indicators, the hourly 200 SMA is currently at 142.96, up from the last close at 141.75 and climbing. Over the past 20 days, the exponential average closing price is 141.58, and trending higher.
EUR/JPY Levels
Current price is 142.57, with resistance ahead at 142.58 (Daily Open), 142.63 (Daily High), 142.66 (Daily Classic S1), 142.76 (Hourly 20 EMA) and 143.02 (Weekly High). Next support to the downside can be found at 142.54 (Hourly 100 SMA), 142.54 (Daily Low), 142.30 (Daily Classic S2), 142.30 (Yesterday's Low) and 142.23 (Weekly Classic R1).