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JPY Turns Higher
The Japanese Yen has emerged as the strongest currency over the European morning on Wednesday. A drop back in risk appetite following a better tone across the European open has rekindled safe-haven demand for the Yen. Additionally, the latest BOJ meeting minutes released overnight showed that policy members expressed concern over upside risks to inflation and cited the need to consider removal of monetary policy stimulus in the event that inflation continues higher. The minutes have once again raised the prospect of a shift in BOJ policy on the horizon, feeding into better demand for JPY.
EUR Under Pressure
EUR has emerged as the weakest currency as we head towards the US session today. A less-hawkish ECB outlook on the back of recent market turmoil has seen EUR coming under selling pressure into the middle of the week. With retail traders currently around 60% short EURJPY, there is plenty of room for a bigger move to develop to the downside here as retail traders move into longs. German wholesale inflation, released today, was seen falling again last month in a further encouraging sign that inflation is calming in the eurozone. Tomorrow’s ECB meeting will be make or break for EUR with traders currently split over whether the bank hikes by .25% or .5%
Technical Views
EURJPY
The pair has been grinding higher within a broad bullish channel over recent weeks. However, price is now turning sharply lower again and is currently testing the channel lows and structural support at the 141.52 level. This is a key pivot for price and a break below here will be firmly bearish targeting a move down to 139.59 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.