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EUR/JPY Price Analysis: Maintains 160.00 as a "Hammer" Emerges in the Wake of EU Data
As market sentiment is influenced by resilient GDP data from the Euro area and subdued inflation in Japan, EUR/JPY edges higher. Technical analysis indicates a possible advance towards the Tenkan-Sen at 160.54, with significant resistance levels at 161.87 and 161.00, both of which were reached on January 19th. Continual downside pressure is a concern, with critical support between 159.50 and 159.70 and the possibility of additional declines to 159.00 and 158.47.
On Tuesday, the EUR/JPY modestly advances, and purchasers reclaim the psychological 160.00 level. As a result of robust GDP data from the Eurozone and inflation data in Japan that are below expectations, the Bank of Japan (BoJ) is relieved of some of the pressure to end its ultra-loose policy. The pair is trading at 160.08 at the time of writing, having fallen to a daily low of 159.21.
The duo is impartial, contrary to what the daily conversation suggests. However, recent fundamental developments and a rise in risk tolerance may create an opportunity to assess the Tenkan-Sen resistance at 160.54. A definitive break could support a stride up to the 161.00 level prior to investors regaining control and propel the exchange rate toward its all-time high of 161.87 on January 19th. At 162.00, further upside is anticipated.
On the contrary, the leg-down would be further intensified if EUR/JPY sellers intervened and blocked a daily close above 160.00. A seven-month-old support trendline between 159.50 and 159.70, which also intersects the Senkou Span A at 159.50, would serve as the initial support. Anticipate a decline to 159.00 once that region has been cleared, followed by a dive to the Senkou Span B at 158.47.
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