EURJPY was lower by 0.50% on the day as the market awaits European inflation data. The pair was trading above the 123.00 level and could break out from a tight range in the days ahead.
Today’s core inflation rate for September will be a key number for the euro after European Central Bank members have voiced their concerns over recent strength. The bank have specifically referred to deflationary pressures from the rally in the single currency and this has led to speculation about currency intervention, or the use of other monetary tools. The number is expected to rise by 0.1% to 0.5% and a lower reading would put pressure on policymakers. Further stimulus could be needed if a deflationary picture was still evident in Europe.
The Japanese Yen was boosted by a rise in consumer confidence during the Asian trading session. The unemployment rate also came in at expectations of 3%. Consumer confidence in Japan was expected to come in at 29.3 but the actual figure was 32.7 and this helped to lift the Yen.
Further pressure is coming to the euro with a worsening of virus cases in the region. In France, there was a warning that Paris could be put on maximum alert to halt the virus spread, while Spain also extended its restrictions across the capital Madrid. Increased lockdowns and curfews could see a hit to GDP expectations.
EURJPY was trading at 123.20 and is now in a range between resistance at 124.50 and support at 122.50. A break lower could target the 120.00 level. If the pair attempts the higher prices then the 50-day moving average ahead of 125.00 will also be an obstacle. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
