The EURJPY pair is currently trading at 159.67, which is almost unchanged from the previous level of 159.689. However, it has slightly decreased from its new year-to-date highs. This movement is due to the release of better-than-expected German HICP data, which has increased the anticipation of higher interest rates in the Eurozone.

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• EUR/JPY trades at 159.67, almost flat but off new YTD highs, as German HICP data beats estimates, fueling expectations of higher Eurozone rates.

The pair currently trades last at 159.689.

The previous day high was 159.06 while the previous day low was 158.24. The daily 38.2% Fib levels comes at 158.75, expected to provide support. Similarly, the daily 61.8% fib level is at 158.56, expected to provide support.

The Euro (EUR) appreciated against the Japanese Yen (JPY) on Wednesday, courtesy of elevated inflation in Germany putting into the table higher rates in the Eurozone (EU), while the Bank of Japan (BoJ) maintaining its loose monetary policy keeps the JPY pressured.

As Thursday’s Asian session begins, the EUR/JPY is trading at 159.67, off the new year-to-date (YTD) highs reached yesterday, almost flat.

Data from the German Federal Statistics Office portrayed August inflation climbing in Germany. The Harmonised Index of Consumer Prices (HICP) rose by 6.4% YoY, above estimates of 6.3%, while on a monthly basis, inflation was 0.4% above estimates of 0.3%.

Given the European Central Bank (ECB), Christine Lagarde’s words at Jackson Hole emphasized the need to set rates at restrictive levels to achieve its 2% inflation target, the release of German inflation triggered a reaction in Bund yields, which rose sharply, underpinning the Euro.

In the meantime, the JPY remains weaker as the Bank of Japan (BoJ) stays the course regarding an ultra-loose monetary policy. However, a BoJ board member, Naoki Tamura, said the central bank has inflation “clearly in sight,” signaling that he’s hoping that around the first quarter of 2024, the BoJ would have clarity on whether the country meets the BoJ’s inflation target.

The EUR/JPY bullish bias remains in place, but traders must be aware of a possible intervention in the Forex market. Although Japanese authorities remain quiet after expressing worries about the USD/JPY exchange rate level, caution is warranted.

The Japanese economic docket will feature Industrial Output, Retail Sales, and Housing Starts. On the Eurozone front, Retail Sales from Germany, CPI in France and Italy, followed by the release of inflation figures in the whole bloc would dictate the direction of the EUR/JPY pair.

Technical Levels: Supports and Resistances

EURJPY currently trading at 159.69 at the time of writing. Pair opened at 158.72 and is trading with a change of 0.61 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 157.98, 50 SMA 156.95, 100 SMA @ 153.12 and 200 SMA @ 147.81.

The previous day high was 159.06 while the previous day low was 158.24. The daily 38.2% Fib levels comes at 158.75, expected to provide support. Similarly, the daily 61.8% fib level is at 158.56, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 158.29, 157.86, 157.47
• Pivot resistance is noted at 159.11, 159.5, 159.93

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