EUR/JPY – nears 115.00 handle, Yen bulls in action

Yen bulls are making their presence felt in Asia on rising uncertainty ahead of FOMC and BOJ,  courtesy of which the EUR/JPY cross dropped one full figure to session low of 115.09 levels.

Hits two-week low

Today’s session low is the lowest level the pair has seen since July 12.  Reports that Japanese government intends to support Ban of Japan in its fight against deflation have gone unnoticed as markets consider the possibility of BOJ under delivering this Friday.

Markets are expecting the central bank to cut rates further into negative territory and expand its QE program. Meanwhile, technical factors following sharp rebound from post Brexit lows could also be behind the drop seen today. Given the empty data docket in Europe, the pair remains at the mercy of the broader market sentiment.

EUR/JPY Technical Levels

The pair was last seen trading around 115.30. Breach of 115.00 (zero figure) could yield 114.10 (38.2% of 122.00-109.20). A violation there would open doors for a test of 113.33 (June 30 low). On the other hand, a break above 115.60 (50% of 122.00-109.20) would expose daily high of 116.41, above which a major hurdle is noted at 117.11 (61.8% of 122.00-109.20).