On Friday, the EUR/JPY found support at the 155.40 area, near the 20-day SMA and then settled at 155.80
The JPY strengthen agains most of its rivals amid strong Labor Cash Earning data from Japan.
Eyes on German CPI data next Tuesday.
At the end of the week, the EUR/JPY traded with losses for a fourth consecutive day, falling to 155.40 and tallying a weekly loss of 1%. In that sense, strong labour market data from Japan made the JPY gain ground agains most of its rivals, including the USD,EUR,GPB and AUD.
During the early Asian Japan reported robust Labor Cash Earnings. The average income of regular employees in the country rose by 2.5% compared to the market’s expectation of 0.7% year-on-year in May. As a reaction, the yields on the 2,5 and 10-year Japanese yields rose to their highest level since May and provide additional boost to the Yen.
As salaries in Japan seem to be rising, the Bank of Japan (BoJ) policy is on view as strong economic data can potentially make the central bank consider pivoting to a more contractive monetary policy.
On the other hand, according to the World Interest Rate Probability (WIRP), a 25 basis point (bps) hike is already priced in for July 27. Looking forward, the likelihood of another 25 basis point hike is approximately 60% by September 14 but becomes fully priced by October 26. For inventors to continue modelling their expectations, the German Consumer Price Index (CPI) to be released next week, will be looked upon.
EUR/JPY Levels to watch
The daily chart suggests that the bear’s time seems to have arrived. The Relative Strength Index (RSI) shows a pronounced negative slope but in positive territory, while the Moving Average Convergence Divergence (MACD) prints higher red bars. However, on the bigger picture, the outlook favours the EUR as the bulls managed to defend the 20-day Simple Moving Average (SMA) and still holds above the 100 and 200-day averages.
Support levels: 155.57 (20-day SMA),154.30, 154.00.
Resistance levels: 156.50, 157.00, 158 (cycle-high).
EUR/JPY Daily chart
-638243630085330673.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/eur-jpy-rejected-at-the-20-day-still-set-for-further-downside-202307072152
