The EURJPY currency pair increased to 157.20, hitting its highest point in July, after being at 156.394 earlier.

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• EUR/JPY rose to a daily high of 157.20, its highest level in July.

The pair currently trades last at 156.394.

The previous day high was 156.15 while the previous day low was 154.88. The daily 38.2% Fib levels comes at 155.66, expected to provide support. Similarly, the daily 61.8% fib level is at 155.36, expected to provide support.

On Wednesday, the EUR/JPY gained ground and rose above the 20-day Simple Moving Average (SMA) of 156.38 and then settled just below it. Monetary policy divergences between the European Central Bank (ECB) and the Bank of Japan (BoJ) weigh in the JPY, while mixed German yields may limit the EUR’s upside potential.

The Core Harmonized Index for Consumer Prices (HICP) from June was revised higher from 5.4% to 5.5% and shows that the Core inflation has yet to cool down as it still hovers around the 5.7% peak seen in March.

Regarding the European Central Bank (ECB) for next week’s meeting, markets have largely priced in a 25 basis points (bps) hike while the odds of a similar hike in September hover around 65%. That being said, German bond yields trade neutral, with the 2-year yield decreasing to 3.16% while the 5-year rate stands at 2.51% and the 10-year yield rose to 2.37%.

Governor Kazuo Ueda put an end to the speculations of a Yield Control Curve policy tweak, implying that he would maintain its policy steady in the next meeting. As inflation is far beyond the bank’s target, he argued, “Unless the premise is shifted, the whole story will remain unchanged.” Those comments caused Japanese yields to decrease, suggesting that markets continue to bet on a dovish stance by the BoJ.

For Thursday’s session, investors will eye Trade Balance data from Japan from June, where Exports are expected to have increased, Imports to have decreased but still have a Trade Balance deficit of nearly ¥-46.7B.

According to the daily chart, buying momentum is rising as the bears seem to have given up. The Relative Strength Index (RSI) points north in positive territory, while the Moving Average Convergence Divergence (MACD) prints lower red bars. In addition, the par now trades above the 20,100 and 200-day Simple Moving Averages (SMA), suggesting that the short-term outlook is bullish.

Resistance Levels: 156.38 (20-day Simple Moving Average), 157.00, 158.00
Support Levels: 156.00, 155.50, 155.00.

Technical Levels: Supports and Resistances

EURJPY currently trading at 156.31 at the time of writing. Pair opened at 155.89 and is trading with a change of 0.27 % .

The pair is trading below its 20 Daily moving average @ 156.38, above its 50 Daily moving average @ 152.64 , above its 100 Daily moving average @ 148.95 and above its 200 Daily moving average @ 146.06

The previous day high was 156.15 while the previous day low was 154.88. The daily 38.2% Fib levels comes at 155.66, expected to provide support. Similarly, the daily 61.8% fib level is at 155.36, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 155.13, 154.37, 153.86
• Pivot resistance is noted at 156.4, 156.91, 157.67

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