EUR/USD surges to five-month high while EUR/JPY resumes its descent

EUR/JPY resumes its descent

On Wednesday EUR/JPY didn’t quite manage to retest its ¥158.57 19 December high and instead resumed its descent after stronger than expected Japan industrial production and retail sales add weight to the argument for tighter monetary policy from the Bank of Japan (BoJ) while US rate cut expectations were brought forward after another successful bond auction.

Last week’s low at ¥156.13 is thus back on the plate, a fall through which would engage the 200-day simple moving average (SMA) at ¥154.87.

Good resistance above Thursday’s ¥157.47 intraday high can be seen along the November-to-December downtrend line at ¥158.12 and the recent mid- to late December highs at ¥158.39 to ¥158.57.

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