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- Strong breakout potential on the EURJPY
News & AnalysisThe EURJPY has been trading under the 142.70 resistance area since the end of December 2022. With the price failing to break through over several occasions, the recent weakness in the Japanese Yen has seen the EURJPY trade beyond the resistance level, signaling the potential for a significant move to the upside.
The recent weakness in the Japanese Yen comes not only because of the strength of the DXY but from the announcement of Kazuo Ueda as the next Bank of Japan (BoJ) Governor. Kazuo Ueda stated that the BoJ’s current monetary policy is appropriate and that should continue.
A sustained move to the upside would not only be dependent on the weakness of the Japanese Yen. A recovery in the strength of the Euro could provide the additional push, to drive the EURJPY higher. ECB President Lagarde has continued to maintain her hawkish view by commenting that she intends to raise rates by 50bps at the next ECB meeting in March.
Looking at the technical analysis, the EURJPY is likely to retrace briefly down to the 23.6% Fibonacci retracement level, which coincides with the resistance turned support level, before trading higher toward the key resistance at 145.60, formed by the previous swing high level. However, if the EURJPY trades significantly lower, past the previous swing low and the 50% Fibonacci retracement level, this breakout potential could be invalidated.
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Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.
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