EUR/JPY extends rally as ECB hike buzz tests Yen risks

Source Fxstreet
  • Lagarde flags upside inflation risks while avoiding rate-path commitments.
  • Yen losses remain limited as intervention fears shadow EUR/JPY upside.
  • Japan CPI, Jibun PMIs and Eurozone PMIs guide cross.

The EUR/JPY extends its advance for the third straight day, set to end the week with solid gains as traders brace for the end of the week. The shared currency didn’t capitalise on the hawkish forward guidance by the European Central Bank (ECB), as Bloomberg, citing sources, revealed that officials are ready to raise rates in September.

Euro gains as ECB hawkishness offsets BoJ intervention caution

Digging into ECB President Christine Lagarde’s press conference, she said that inflation risks are tilted to the upside and growth to the downside, but stated that the central bank would set monetary policy to ensure that inflation returns to the 2% goal in the medium term. She added that they would remain data-dependent and would not pre-commit to an interest rate path.

Meanwhile, the Japanese Yen weakened less than expected against the Euro as investors remain wary that the Bank of Japan (BoJ) might intervene in the foreign exchange markets to push its local currency.

On Friday, EUR/JPY traders will be watching the release of Japanese inflation data. The National CPI excluding Fresh Food is expected to rise from 1.4% to 1.6% YoY. Also, traders would be looking for updates on Jibun Bank Flash PMIs, with the manufacturing activity index measure expected to ease from 54.8 to 54.5.

In the Eurozone, traders will also digest HCOB Flash PMIs for Germany, France, and the European Union (EU). The EU’s HCOB Manufacturing PMI is expected to drop from 51.4 to 51.3, while the Services PMI is expected to improve, but will remain in contractionary territory, from 49.4 to 49.8.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY daily chart shows that momentum is tilted to the upside, further confirmed by a rising Relative Strength Index (RSI). Additionally, a trendline break since last week shifted the market structure from sideways trading to an uptrend, as prices drift higher at a modest pace.

For a bullish continuation, the EUR/JPY needs to clear the April 30, high at 187.56, before buyers can eye 187.95, the year-to-date (YTD) high. Above lies the psychological 188.00 and 190.00 levels.

On the downside, sellers could trigger a break of the market structure, but first they need to clear Thursday’s low of the day (LOD) at 186.05. Once done, they could test the confluence of the 50 and 100-day SMAs at 185.16/02, before targeting the 200-day SMA at 183.44.

EUR/JPY Price Chart – Daily

EUR/JPY daily chart

Japanese Yen Price This week

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the Swiss Franc.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.43% 1.03% 0.92% 0.48% -0.03% 1.08% 1.01%
EUR -0.43% 0.61% 0.43% 0.07% -0.43% 0.65% 0.58%
GBP -1.03% -0.61% -0.17% -0.54% -1.03% 0.03% 0.02%
JPY -0.92% -0.43% 0.17% -0.36% -0.90% 0.11% 0.20%
CAD -0.48% -0.07% 0.54% 0.36% -0.47% 0.46% 0.58%
AUD 0.03% 0.43% 1.03% 0.90% 0.47% 1.11% 1.07%
NZD -1.08% -0.65% -0.03% -0.11% -0.46% -1.11% -0.02%
CHF -1.01% -0.58% -0.02% -0.20% -0.58% -1.07% 0.02%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decisionThe US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
Author  Mitrade
Sep 28, Mon
The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
placeholder
【Daily Brief】30-year Treasury tops 5.59%, S&P 500 slips to 7,670 and gold holds $4,180 — PCE lands tonightThe 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
Author  Suzie
Sep 30, Wed
The 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
placeholder
Gold falls to near $4,150 as higher Treasury yields, oil prices outweigh softer PCE inflationGold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
Author  FXStreet
Yesterday 01: 26
Gold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
placeholder
United States Dollar Index sits near March 2025 highs, above 102.00 ahead of US NFPThe US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the fifth straight day and climbs back above the 102.00 mark during the Asian session on Friday.
Author  FXStreet
12 hours ago
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the fifth straight day and climbs back above the 102.00 mark during the Asian session on Friday.
Related Instrument
goTop
quote