Euro/Yen Analysis

The Euro/Yen from an Economic Perspective

The euro/yen pair is trading within a narrow range today following yesterday’s gains, as traders await the Bank of Japan’s decision early Friday morning and expectations of an interest rate hike from 1% to 1.25%, which would be the highest level in 31 years, with the bank signaling its readiness to continue raising borrowing costs.

On the other side of the eurozone, the European Central Bank is keeping the door open for further interest rate hikes if inflation does not slow down.

EUR/JPY from a Technical Perspective

The EUR/JPY pair completed the harmonic bat pattern after reaching 179.35 yesterday, and the pair has indeed begun to pull back.

We currently expect the pair to reach the 178.60 support level as an initial target, followed by the 178.00 level as a secondary target.

Finally, the 177.40 level.

This scenario would be invalidated if the pair breaks above 179.70.