Forex Market: EUR/JPY daily forecast

May 8, 2014 8:12 am

During yesterday’s trading session EUR/JPY traded within the range of 141.16-142.00 and closed at 141.71.

At 8:08 GMT EUR/JPY traded at 141.78, adding 0.04% for the day. The pair broke the first key support and touched a daily high at 141.86 at 7:35 GMT.

Fundamental view

At 11:45 GMT the European Central Bank will announce its decision on borrowing costs. The benchmark interest rate will probably be left unchanged at 0.25% at the policy meeting, according to the median estimate by experts. However, the recent strength of the euro is increasing pressure on central bank’s policy makers to take action, because the strong currency keeps inflation depressed. A cut in rates would have a bearish effect on the 18-nation common currency.

The decision on policy will be followed by a press conference with ECB President Mario Draghi, scheduled at 12:30 GMT. Market volatility during this event is usually high.

Technical view

Screenshot from 2014-05-08 11:12:02

According to Binary Tribune’s daily analysis, in case EUR/JPY manages to breach the first resistance level at 142.09, it will probably continue up to test 142.46. In case the second key resistance is broken, the pair will probably attempt to advance to 142.93.

If EUR/JPY manages to breach the first key support at 141.25, it will probably continue to slide and test 140.78. With this second key support broken, the movement to the downside will probably continue to 140.41.

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