EUR/JPY has been quite corrective in nature residing inside the range between 128.50 and 129.70. Recently EUR could not provide positive economic reports to continue the bullish trend against JPY. ECB has been quite hawkish recently. EUR is expected to continue further with more bullish momentum in this pair but in the short and medium term some bearish pressures are expected due to few unchanged and mixed economic reports from the eurozone recently. Today EUR German 30-y Bond Auction report was published at 1.29|1.8 which previously was at 1.02|2.0. The economic report was not quite effective to push EUR up against JPY today due to its low-impact on the market. On the other hand, today Japan does not present any economic reports but tomorrow JPY Trade Balance report is due which is expected to decrease to 0.12T from previous value of 0.13T. The Bank of Japan Policy Rate decision will be published along the Monetary Policy Statement and BOJ Outlook report, so the key interest rate is expected to be unchanged at -0.10%. After the BOJ Press Conference on further monetary policy and interest rate decisions, the overall economic outlook of the country, inflation and future monetary policy will be discussed. A large number of high impact economic events are going to be held tomorrow on the JPY side which is expected to bring in higher volatility and uncertain spikes in the market. JPY is expected have an upper hand over EUR and gain some momentum after the JPY economic events tomorrow. As Japan's economic events are tentative tomorrow, this effect is expected to last until the daily close tomorrow.
Now let us look at the technical chart. The price is currently residing between the range of 128.50-129.70 area. As the price is currently showing some rejection of the bulls, the pair is expected to break below 128.50 and reach towards 125.80 support level in the coming days. As the dynamic level 20 EMA is quite away from the current price level, so mean reversion towards 20 EMA is expected in the coming days. As the price remains below 129.70 with a daily close the bearish bias is expected to continue for the short or medium term.
