German consumer price index (HICP), which was lower than expected, led to the currency pair EURJPY encountering resistance around the 157.50 level.

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• EUR/JPY finds offers near 157.50 as German HICP remained softer than expectations.

The pair currently trades last at 157.444.

The previous day high was 157.62 while the previous day low was 156.96. The daily 38.2% Fib levels comes at 157.21, expected to provide support. Similarly, the daily 61.8% fib level is at 157.37, expected to provide support.

The EUR/JPY pair faces some selling pressure after a sharp upside to near 157.50 in the late European session. The asset finds some offers as the preliminary German Harmonized Index of Consumer Price (HICP) report for September remained softer than expectations.

Monthly HICP expanded at a slower pace of 0.2% against expectations of 0.3% and August’s reading of 0.4%. On an annualized basis, the headline HICP softened to 4.3% vs. the estimates of 4.5% and the former release of 6.4%. Inflation in the German economy decelerated despite rising energy prices. This indicates that households’ demand is weakening as inflation bites real income.

In spite of inflation softening in Germany, the odds for one more interest rate hike from the European Central Bank (ECB) remain intact. ECB President Christine Lagarde said this week that despite progress on inflation it is seen too high for too long as the labor market has so far remained resilient. She made it very clear that interest rates will remain sufficiently restrictive for long enough till inflation comes down to near 2%.

For further guidance, investors will focus on the Eurozone HICP data, which will be published on Friday at 09:00 GMT.

On the Japanese Yen front, expectations for a stealth intervention by the Bank of Japan (BoJ) in the FX domain due to excessive currency volatility have deepened. The Japanese Yen has dropped to near 150.00 against the US Dollar. The odds for BoJ’s stealth intervention are high as Governor Kazuo Ueda conveyed that it is premature to ditch expansionary monetary policy as inflation needs to stabilize above the 2% target.

Technical Levels: Supports and Resistances

EURJPY currently trading at 157.29 at the time of writing. Pair opened at 157.15 and is trading with a change of 0.09 % .

The pair is trading below its 20 Daily moving average @ 157.81, below its 50 Daily moving average @ 157.59 , above its 100 Daily moving average @ 155.2 and above its 200 Daily moving average @ 149.3

The previous day high was 157.62 while the previous day low was 156.96. The daily 38.2% Fib levels comes at 157.21, expected to provide support. Similarly, the daily 61.8% fib level is at 157.37, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 156.86, 156.58, 156.2
• Pivot resistance is noted at 157.52, 157.9, 158.19

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