Rising risk-on sentiment helped the EUR/USD to resume strong gains, as the pair moved towards the highest levels in 28 months, reaching towards the resistance at the 136.36 level, the highest level since October 2015. Optimism for the EUR due to the close tightening of the ECB policy supported the Euro’s stronger gains against other majors. The economic sectors results in the Eurozone will support voices calling for abandoning the quantitative easing policy. The pair is awaiting an important announcement today in the shape of Eurozone inflation numbers, and achieving gains for the inflation will support more gains for the Euro against other majors.
The markets abandoning the dollar, despite the American administration steps and the economic numbers, contributed strongly in the Euro’s upward chances. The Eurozone sectorial numbers, as well as the comments from ECB officials about the near ending of the banks stimulation plans to enter into a policy tightening race with other central banks, helped strongly in the last move of this pair.
We have consistently mentioned in previous analysis that buying the pair from each downward bounce is the best strategy for this pair. The pair is waiting for more risk appetite to have a stronger upward chance. The ECB didn’t provide any updates regarding their monetary policy, maintaining the interest rate as is, and Draghi’s comments were normal, and the Euro didn’t have any reactions with the any other major currency.
Technically: The EUR/JPY is currently in a strong bullish move, and the nearest resistance levels are currently at 135.55 and 136.60, with the nearest support levels are at 134.90, 134.20 and 133.50. We still prefer buying the pair at each downward bounce. More sentiment means more gains for this pair.
On the economic data front: Today’s economic is not expecting any important data from Japan. From the Eurozone, there will be an announcement of the consumer price index. The pair will be on the watch for any developments regarding the move towards safe heavens led by the JPY in case of more geopolitical worries regarding the conflict between North Korea and the US, or the political worries in the Trump administration.