The pair EURJPY, at a rate of 157.312, has gained buying interest resulting in a rise to its highest level of the day. This movement has also caused it to test a downward resistance line that has been in place for the past six weeks.

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• EUR/JPY picks up bids to refresh intraday high, prods six-week-old descending resistance line.

The pair currently trades last at 157.312.

The previous day high was 156.85 while the previous day low was 155.81. The daily 38.2% Fib levels comes at 156.45, expected to provide support. Similarly, the daily 61.8% fib level is at 156.21, expected to provide support.

EUR/JPY takes the bids to refresh its intraday high near 157.70 as it pokes a 1.5-month-long falling resistance line heading into Tuesday’s European session. In doing so, the cross-currency pair pays little heed to the downbeat German inflation clues, confirming the initial forecasts, as well as the sluggish Treasury bond yields. That said, the pair’s run-up could be linked to the increasing odds of the Bank of Japan’s (BoJ) sustained easy-money policy backed by the latest wage data from Tokyo.

Earlier in the day, Japan’s Labor Cash Earnings came in better-than-forecast for June but the real wages were downbeat enough to defend the dovish bias about the BoJ. That said, Japan’s inflation-adjusted real wages dropped for the 15th consecutive month in June to 1.6% YoY versus 0.9% prior.

On Monday, the Bank of Japan’s (BoJ) Summary of Opinions for the July meeting showed that one member said the achievement of 2% inflation in a sustainable and stable manner seems to have clearly come in sight.

It’s worth noting that the tweaking of BoJ’s Yield Curve Control (YCC) policy previously triggered the EUR/JPY pullback.

Elsewhere, Germany’s inflation gauges per the Harmonized Index of Consumer Prices (HICP) and the Consumer Price Index (CPI) match initial forecasts of 6.5% YoY and 6.2% YoY and confirm the bearish bias about the European Central Bank (ECB).

Previously, the Eurozone Sentix Investor Confidence improved to -18.9 for August from -22.5 in July, versus the market consensus of a -23.4 reading. Following the data, Sentix Managing Director Patrick Hussy termed Germany as the sick man of the Eurozone while also adding, “The economy in the Eurozone remains in recession mode. There can therefore be no joy about this development.”

Amid these plays, S&P500 Futures prints mild losses around 4,530 as it retreats towards the monthly low marked the last Friday, reversing the first daily gain in five marked on Monday. That said, the US 10-year and two-year Treasury bond yields remain pressured around 4.06% and 4.76% by the press time.

Looking ahead, a light calendar may challenge the EUR/JPY pair’s upside move targeting the yearly top of 158.00.

An impending bull cross on the MACD joins the upward-sloping RSI (14) line, not overbought, to propel EUR/JPY prices toward a six-week-old descending resistance line surrounding 157.70, a break of which could push buyers toward the yearly high marked in June near 158.00. Meanwhile, the 21-DMA puts a floor under the prices near 155.95.

Technical Levels: Supports and Resistances

EURJPY currently trading at 157.63 at the time of writing. Pair opened at 156.8 and is trading with a change of 0.53% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 155.87, 50 SMA 154.64, 100 SMA @ 150.73 and 200 SMA @ 146.76.

The previous day high was 156.85 while the previous day low was 155.81. The daily 38.2% Fib levels comes at 156.45, expected to provide support. Similarly, the daily 61.8% fib level is at 156.21, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 156.12, 155.44, 155.08
• Pivot resistance is noted at 157.17, 157.53, 158.21

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