Forecast for the EUR/JPY Pair

EUR/JPY from an Economic Perspective 

The EUR/JPY pair rebounded today from the 185.75 level amid a lack of economic data from the eurozone, as markets await the Jackson Hole symposium tomorrow, Friday.

We are also awaiting inflation data from Japan. Forecasts indicate that the Bank of Japan needs to raise interest rates to at least 1.5% from the current 1% as soon as possible, however, one or two additional rate hikes will likely not be enough to reverse the yen’s decline.

Instead, external factors could support the yen, such as a slowdown in U.S. growth or an easing of tensions in the Middle East, which would reduce the cost of oil imports.

EUR/JPY from a Technical Perspective

The EUR/JPY pair is attempting to reach the support levels of 185 as a first target and then 183.20 as a second target under the influence of the negative divergence on the MACD indicator.

As long as we remain below 186.05.

If the pair breaks above 186.05, we can expect another rally toward the 187.00/25 levels and consider entering a position there, given the proximity to the daily downtrend line.