EUR/JPY: bulls with eyes on 2015-2017 downtrend at 122.60

Currently, EUR/JPY is trading at 122.04, up 0.03% on the day, having posted a daily high at 122.20 and low at 121.93.

EUR/JPY is better-bid still having broken onto the 122 handle with a renewed optimism for the EZ economy and a less dovish ECB of late. The yen on the other hand, received a bearish picture on the back of the BoJ yesterday and trades with a bearish bias. 

BOJ’s Kuroda: BOJ will manage policy by watching the data

"Gov. Kuroda maintained a dovish tone throughout his press conference as he highlighted a lack of momentum in reaching the price stability target and underscored that growth risks were ‘tilted to the downside’," explained analysts at Scotiabank, adding, "Kuroda also hinted to the risk of further rate cuts ‘if needed’. The outlook for relative central bank policy remains bearish for JPY, with both 2Y and 10Y yields spreads hovering just below their recent multi-year highs and set to widen further throughout 2017."

EUR/JPY levels

EUR/JPY is making tracks back towards the 2015-2017 downtrend at 122.60 and the 3-month downtrend at 122.82. "These represent pretty tough resistance for the market but we look for dips lower to remain relatively shallow however and the market should remain well supported circa the 55-day ma at 121.26 and the 20-day ma at 120.48," explained analysts at Commerzbank. 

Longer term outlook is positive: 

The same analysts explained that above the 4-month downtrend lies another downtrend at 123.88 and the 124.08 December high. "Only below the 118.25 recent low will negate our upside bias. Below here lies the 117.58 200 day ma and the 116.69/37 50% retracement."