1 Aug 2013
EUR/JPY nudges lower as Draghi urges reform
FXstreet.com (Barcelona) - Having climbed off support at 130.00 into the European session to post a high at 130.99, EUR/JPY largely moved in a 60 pip range before declining following the ECB decision to hold rates at 0.5%.
Draghi urges reform amid subdued prospects
With European PMIs generally better than expected and the ECB holding policy rates, focus has fallen on ECB President Mario Draghi who in his policy statement, commented that incoming data has confirmed his previous statement, and that inflation expectations remain firmly anchored while monetary and credit dynamics are also subdued. Further, he added that rates will “remain low for an extended period” and that policy will be designed to match domestic demand. Elsewhere he commented that he sees downside risks to the economic outlook given the recent tightening of market rates. Again, Draghi highlighted that a significant risk is that beleaguered nations insufficiently implement reform. The initial reaction to his statement has seen EUR/JPY decline to test support at 130.50.
EUR/JPY Technically Bearish
The FXstreet.com Trend Index indicates that the pair is slightly bearish. Daily classic pivot points can be found, starting with support below at the daily pivot at 130.11, S1 at 129.40, and S2 at 128.61. Above, resistance can be found at R1 at 130.90, R2 at 131.61 and R3 at 132.40. Hourly oscillators are showing Stochastics just below overbought territory at 68, while RSI sits at 57 but absent direct directional momentum.
Draghi urges reform amid subdued prospects
With European PMIs generally better than expected and the ECB holding policy rates, focus has fallen on ECB President Mario Draghi who in his policy statement, commented that incoming data has confirmed his previous statement, and that inflation expectations remain firmly anchored while monetary and credit dynamics are also subdued. Further, he added that rates will “remain low for an extended period” and that policy will be designed to match domestic demand. Elsewhere he commented that he sees downside risks to the economic outlook given the recent tightening of market rates. Again, Draghi highlighted that a significant risk is that beleaguered nations insufficiently implement reform. The initial reaction to his statement has seen EUR/JPY decline to test support at 130.50.
EUR/JPY Technically Bearish
The FXstreet.com Trend Index indicates that the pair is slightly bearish. Daily classic pivot points can be found, starting with support below at the daily pivot at 130.11, S1 at 129.40, and S2 at 128.61. Above, resistance can be found at R1 at 130.90, R2 at 131.61 and R3 at 132.40. Hourly oscillators are showing Stochastics just below overbought territory at 68, while RSI sits at 57 but absent direct directional momentum.