27 May 2015
EUR/JPY: 133.10 supports last week's downside
FXStreet (Guatemala) - EUR/JPY is currently trading a 133.89 with a high of 133.99 and a low of 133.76.
EUR/JPY is somewhat caught up in the middle of he euro's weakness, US dollar strength and the Yen being hammered from all sides as the market gets a great deal shorter of the Japanese currency. There are a number of factors weakening the Yen, but the currency has been unable to recover to any convincing extent following the announcement late last week from the IMF calling for the reinforcement of all three arrows of Abenomics.
Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ, Ltd explained that "The IMF has called specifically on the BoJ to implement “additional monetary easing while strengthening its effectiveness through more explicit guidance…to enhance inflation dynamics...Additional government bond purchases of longer maturities “would further lower the long end of the yield curve and strengthen the commitment to low interest rates for as long as it takes”."
Meanwhile, USD/JPY is on a breakout of the daily bullish triangle and on to the 123 handle. Today, we have seen the release of the Bank of Japan Minutes from April 30 where the minutes echoed the usual with Central Banks intentions to continue easing until 2% inflation stable.
Technically, the pressures to 133.10 from last week are being consolidated while Karen Jones, chief analyst at Commerzbank still explained that they would allow for near term slippage back to the 131.09 55 day ma. "The count of the Elliott wave count is suggesting that near term weakness will terminate in this vicinity. It is also considered to be the break down point to the 126.08 low."
EUR/JPY is somewhat caught up in the middle of he euro's weakness, US dollar strength and the Yen being hammered from all sides as the market gets a great deal shorter of the Japanese currency. There are a number of factors weakening the Yen, but the currency has been unable to recover to any convincing extent following the announcement late last week from the IMF calling for the reinforcement of all three arrows of Abenomics.
Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ, Ltd explained that "The IMF has called specifically on the BoJ to implement “additional monetary easing while strengthening its effectiveness through more explicit guidance…to enhance inflation dynamics...Additional government bond purchases of longer maturities “would further lower the long end of the yield curve and strengthen the commitment to low interest rates for as long as it takes”."
Meanwhile, USD/JPY is on a breakout of the daily bullish triangle and on to the 123 handle. Today, we have seen the release of the Bank of Japan Minutes from April 30 where the minutes echoed the usual with Central Banks intentions to continue easing until 2% inflation stable.
Technically, the pressures to 133.10 from last week are being consolidated while Karen Jones, chief analyst at Commerzbank still explained that they would allow for near term slippage back to the 131.09 55 day ma. "The count of the Elliott wave count is suggesting that near term weakness will terminate in this vicinity. It is also considered to be the break down point to the 126.08 low."