Back
2 Oct 2013
EUR/JPY gets boosted after unchanged rate, ahead of ECB conference
FXstreet.com (Athens) – The EUR/JPY is heading steadily upwards after the ECB left key benchmark interest rate at 0.50%.
EUR/JPY moving upwards after ECB; will the EUR/JPY make or break after Draghi’s?
The EUR/JPY is moving upwards after ECB left both the benchmark interest rate and the deposit facility rate unchanged at 0,50% and 0,00%, respectively. Surely, the cross is supported to a major extent by the fact that Italian 10yr yields drop 7bps to 4.35% following Berlusconi comments that he will back Letta. Elaborating on, the Italian political debacle evolves as it appears that Prime Minister Letta will retain the coalition - despite losing overall support in the Senate – therefore the single currency gets a bit “lifted-up” on good news regarding the Italian political backdrop. What’s more, while traders should not expect another immediate LTRO, it is highly anticipated that the ECB should outline all of the data that suggest another one might be more than appropriate over the coming months. Being more précised, taken for granted that Euro-Zone banks’ capital levels have receded back to December 2011 levels, Euro-Zone inflation has fallen back to its lowest level since February 2011 as well as the very weak credit growth, we should not be astonished if ECB comes out with a very dovish stance, considering a third LTRO.
Technical Outlook on EUR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend.The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”
EUR/JPY moving upwards after ECB; will the EUR/JPY make or break after Draghi’s?
The EUR/JPY is moving upwards after ECB left both the benchmark interest rate and the deposit facility rate unchanged at 0,50% and 0,00%, respectively. Surely, the cross is supported to a major extent by the fact that Italian 10yr yields drop 7bps to 4.35% following Berlusconi comments that he will back Letta. Elaborating on, the Italian political debacle evolves as it appears that Prime Minister Letta will retain the coalition - despite losing overall support in the Senate – therefore the single currency gets a bit “lifted-up” on good news regarding the Italian political backdrop. What’s more, while traders should not expect another immediate LTRO, it is highly anticipated that the ECB should outline all of the data that suggest another one might be more than appropriate over the coming months. Being more précised, taken for granted that Euro-Zone banks’ capital levels have receded back to December 2011 levels, Euro-Zone inflation has fallen back to its lowest level since February 2011 as well as the very weak credit growth, we should not be astonished if ECB comes out with a very dovish stance, considering a third LTRO.
Technical Outlook on EUR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend.The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”