The EUR/JPY pair experienced a significant uptick, surpassing the 157.00 mark, despite a disappointing ZEW economic sentiment survey from the Eurozone and Germany. This surge was primarily driven by the strengthening US dollar against the Japanese yen, influenced by positive US retail sales data.
While the Federal Reserve’s upcoming monetary policy meeting remains a key focus, the recent economic indicators have painted a mixed picture. On one hand, the stronger-than-expected US retail sales figures have bolstered the greenback. On the other hand, the Eurozone and Germany’s ZEW survey, which assesses investor expectations, has shown a decline, suggesting growing economic uncertainty.
Central bank policies have also played a role in influencing the currency pair. The European Central Bank’s (ECB) member, Gediminas Simkus, has ruled out the possibility of an interest rate cut in October. Meanwhile, analysts at Standard Chartered anticipate that the Bank of Japan (BoJ) might raise its interest rates to 0.50% by the end of the year.
The overall technical outlook for the EUR/JPY pair remains uncertain, with the upcoming Federal Reserve meeting potentially exerting significant pressure on both currencies. A risk-off environment triggered by the Fed’s decision could lead to a decline in the EUR/JPY. However, if the pair can maintain its current momentum, it may face resistance levels at 158.49 and 159.51.
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