EUR/USD, EUR/JPY and USD/JPY outlook ahead of plethora of central bank meetings
Outlook on EUR/USD, EUR/JPY and USD/JPY ahead of FOMC and ECB rate decisions.
EUR/USD muted ahead of Fed and ECB rate decisions
EUR/USD’s reversal off Wednesday’s four-month high at $1.1017 on softer eurozone inflation, which brought forward European Central Bank (ECB) rate cut expectations, took the cross to last week’s low at $1.0724.
It is now hovering above this low in low volume trading ahead of Wednesday’s Federal Open Market Committee (FOMC) and Thursday’s ECB meetings.
A fall through $1.0724 would engage the 55-day simple moving average (SMA) and late October high at $1.0695 whereas a rise above Friday’s high at $1.08, Thursday’s high and the 200-day SMA at $1.0817 to $1.0825. Further up the 22 November-low at $1.0853 may also act as resistance, were it to be reached at all.
Sharp EUR/JPY drop is followed by a swift recovery rally
EUR/JPY’s sharp decline off its ¥164.30 November peak amid ECB rate cut expectations accelerated last week when the Bank of Japan (BoJ) Governor Kazuo Ueda’s hinted at ending the country’s negative interest-rate policy.
Since then a swift reversal to the upside is taking the cross back up towards its late October-low at ¥157.70 despite a business survey index of large manufacturing firms in Japan hitting a two-year high.
Further up the steep November-to-December downtrend line at ¥158.98 should also act as resistance. Minor support is seen at Friday’s ¥156.09 high.
USD/JPY resumes its ascent
USD/JPY’s sharp drop amid the BoJ talking about phasing out its massive stimulus next year has taken it to ¥141.63, to around the 200-day SMA at ¥142.34 which acted as support last week.
Since then, a recovery rally has been underway with the two-month downtrend line and the 20 November low at ¥147.12 to ¥147.15 being within reach.
While the next higher reaction high on the daily chart at Wednesday’s ¥147.50 high isn’t overcome, overall downside pressure retains the upper hand.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
