The EUR/JPY cross demonstrated resilience during Thursday’s trading session, drawing support near the 164.15-164.10 range before ascending to a new daily high in the early European market hours, currently hovering around the 164.65-164.70 level. This upward movement follows a two-day downturn that led to the weekly low registered on Wednesday.
Factors contributing to the Japanese Yen‘s (JPY) weakened position include the Bank of Japan‘s (BoJ) cautious stance and the ambiguity surrounding future rate adjustments. Additionally, anticipation builds ahead of the European Central Bank (ECB) meeting, prompting repositioning trades that favor the EUR/JPY cross. Despite these tailwinds, market analysts warn of potential barriers hindering aggressive bullish activity and limiting upward momentum.
Japanese authorities’ verbal commitments to intervene in currency markets to mitigate excessive depreciation of the Yen, coupled with a prevailing cautious market sentiment, are expected to temper losses for the safe-haven JPY. Furthermore, speculations regarding the ECB’s inclination towards interest rate cuts in June amid a faster-than-expected decline in Eurozone inflation further weigh on the EUR/JPY cross.
Market attention remains fixated on forthcoming economic projections and ECB President Christine Lagarde’s remarks during the post-meeting press conference, offering insights into the potential timing of rate adjustments. These developments are poised to influence the Euro’s performance in the short term and provide directional guidance for the EUR/JPY cross. Nonetheless, prevailing market fundamentals advise prudence for bullish traders amidst prevailing uncertainties.
