EURJPY at a level of 151.183 might find a possible level of support around 151.00 as the ECB prepares to raise interest rates, leading to an increase in policy divergence between the ECB and the BoJ.

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• EUR/JPY is looking for a potential support around 151.00 as an interest rate hike by the ECB to widen ECB-BoJ policy divergence.

The pair currently trades last at 151.183.

The previous day high was 151.38 while the previous day low was 150.04. The daily 38.2% Fib levels comes at 150.86, expected to provide support. Similarly, the daily 61.8% fib level is at 150.55, expected to provide support.

The EUR/JPY pair has sensed some support after a mild correction to near 151.00 in the late Asian session. The cross has remained in the bullish trajectory from the past few trading sessions as investors are hoping that the European Central Bank (ECB) will raise interest rates further.

ECB President Christine Lagarde has already raised interest rates to 3.75% in its long policy-tightening cycle over the past nine months. And, the street is anticipating one more interest rate hike by 25 basis points (bps), which will push interest rates to 4%. Inflation in Eurozone is more than three times of required inflation and ECB policymakers believe that the current monetary policy is not restrictive enough to threaten the shared continent’s growth.

However, economic prospects in Eurozone are telling a different story. The display of contraction in the Gross Domestic Product (GDP) figures consecutively for two quarters is considered a technical recession. And considering the definitional aspect of recession shows that the German economy has already reported a recession after posting a contraction in GDP.

In addition to that, Eurozone also showed a contraction in the final reading of GDP in the first quarter of CY2023.

Meanwhile, the Japanese Yen is struggling to remain on its feet as investors are confident that the interest rate decision by the Bank of Japan (BoJ) will remain unaltered this Friday. In order to propel wages and overall demand to spurt in-house inflation, constant monetary stimulus is required as current inflationary pressures are inspired by higher import prices.

Technical Levels: Supports and Resistances

EURJPY currently trading at 151.17 at the time of writing. Pair opened at 151.34 and is trading with a change of -0.11 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 149.8, 50 SMA 148.32, 100 SMA @ 145.53 and 200 SMA @ 144.35.

The previous day high was 151.38 while the previous day low was 150.04. The daily 38.2% Fib levels comes at 150.86, expected to provide support. Similarly, the daily 61.8% fib level is at 150.55, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 150.46, 149.57, 149.11
• Pivot resistance is noted at 151.8, 152.26, 153.14

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