EUR/USD, EUR/JPY and USD/JPY rally post ECB and BoJ meetings
Outlook on EUR/USD, EUR/JPY and USD/JPY post hawkish ECB but dovish BoJ meetings.
EUR/USD rallies to one-month high
EUR/USD surged higher on Thursday as the European Central Bank (ECB) hiked its rates by 25 basis-points (bp) to 3.5% as expected but left room for a couple more rate hikes and as this week’s “pause” by the Federal Reserve (Fed) is being interpreted by the market as a possible end to monetary tightening in the US.
The US dollar has thus taken a hit and is rapidly depreciating which benefits EUR/USD. The cross has so far risen to $1.0962, close to its $1.0973 early-April high. Further up lies the minor psychological $1.10 mark around which the advance is likely to at least short-term stall.
Potential slips may find support along the 55-day simple moving average (SMA) at $1.0884.
EUR/JPY rallies to near 15-year high
EUR/JPY is accelerating to the upside and is now trading at levels last seen in September 2008, with the ECB hiking its rates and remaining hawkish while the Bank of Japan (BoJ) sticks to its ultra-loose monetary policy.
The cross is on track for its fifth consecutive day of the higher prices with the minor psychological ¥155.00 mark about to be reached. Above it lies the February 2007 high at ¥159.65.
There is no support to speak of until the ¥151.61 early-May high.
USD/JPY revisits its seven-month high
USD/JPY revisits Thursday’s seven-month high at ¥141.50, with the BoJ keeping its short-term interest rate unchanged at 0.1% and that of the 10-year bond yield at around 0% at Friday’s meeting while the Fed “skipped” a rate hike at Wednesday’s monetary policy meeting.
Above it beckons the late November 2022 peak at ¥142.25. Minor support can be spotted at the ¥140.93 May peak and also at the early June high at ¥140.45.
While Friday morning’s ¥139.86 low isn’t being slipped through, immediate upside pressure is expected to remain in play.
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