#EURJPY @ 144.858 has sensed selling pressure around 145.00 amid rising bets for the expansion of JGBs’s yields cap. (Pivot Orderbook analysis)

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• EUR/JPY has sensed selling pressure around 145.00 amid rising bets for the expansion of JGBs’s yields cap.
• BoJ Ueda has already conveyed that Japanese inflation is coming from international forces and is not growing domestically.
• A recovery in German Retail Sales might propel inflationary pressures.

The pair currently trades last at 144.858.

The previous day high was 145.44 while the previous day low was 144.56. The daily 38.2% Fib levels comes at 144.9, expected to provide resistance. Similarly, the daily 61.8% fib level is at 145.11, expected to provide resistance.

The EUR/JPY pair has faced barricades around 145.00 after a recovery move in the Tokyo session. It looks like the cross has retreated on expectations that Bank of Japan (BoJ) Governor Haruhiko Kuroda could tweak the Yields Curve Control (YCC) on Japanese Government Bonds (JGBs), in his last monetary policy announcement.

A power-pack action is expected from the Japanese Yen as investors will keenly watch BoJ Kuroda last time dictating the monetary policy. Harsh struggles in lifting the labor cost index and spurting growth rates by the Japanese economy might compel the BoJ to sound dovish on interest rates. A continuation of an ultra-loose monetary policy is expected as Tokyo inflation showed a steep decline in January.

BoJ Governor Nominee Kazuo Ueda has already conveyed that inflationary pressures in the Japanese economy are coming from international forces and are not growing domestically. Therefore, the maintenance of an expansionary monetary policy is highly expected.

Over yield cap, Reuters reported that “With rising inflation pushing up long-term interest rates, some investors bet the BOJ may tweak yield curve control (YCC), such as by raising the 10-year yield cap, as early as next week’s policy meeting.”

On the Eurozone front, the Euro is likely to dance to the tunes of German Retail Sales data. The monthly data is expected to deliver an expansion by 2.0% vs. a contraction of 5.3% released earlier. The release of the same will clear that retail demand is recovering again and could spurt inflation ahead.

European Central Bank (ECB) policymaker and Spanish central bank head Pablo Hernandez de Cos said on Tuesday, “Spanish core CPI is to remain high in the short term, then gradually decline.” This could force ECB President Christine Lagarde to go strong for interest rates beyond March.

Technical Levels: Supports and Resistances

EURJPY currently trading at 144.88 at the time of writing. Pair opened at 144.7 and is trading with a change of 0.12 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 143.34, 50 SMA 141.79, 100 SMA @ 143.17 and 200 SMA @ 141.73.

The previous day high was 145.44 while the previous day low was 144.56. The daily 38.2% Fib levels comes at 144.9, expected to provide resistance. Similarly, the daily 61.8% fib level is at 145.11, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 144.36, 144.02, 143.48
• Pivot resistance is noted at 145.24, 145.78, 146.12

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