Key Moments
- EUR/JPY eased from a 12-week high at 186.67 but stayed above the prior peak around 186.32.
- Investors were focused on the ECB policy announcement, with expectations for the Deposit Facility Rate to remain at 2.25%.
- Technical indicators showed EUR/JPY consolidating with a bullish bias, as dips held above the mid-June highs near 186.30.
Euro-Yen Pullback Limited Despite Profit-Taking
The Euro (EUR) softened against the Japanese Yen (JPY) on Thursday as traders adjusted positions ahead of the European Central Bank’s (ECB) policy decision. Despite the intraday retracement, EUR/JPY continued to trade near its highest levels in almost three months, with declines finding support above the earlier breakout zone around 186.30. The pair slipped from a recent 12-week peak at 186.67 but continued to hold above previous highs near 186.32.
ECB Expectations and Policy Divergence Pressure the Yen
Market participants concentrated on the ECB’s upcoming monetary policy announcement scheduled for later in the day. The central bank was widely expected to keep its benchmark Rate on Deposit Facility unchanged at 2.25%, while signaling that additional tightening remained possible. A recent upswing in oil prices was seen as a factor that could reinforce near-term inflation pressures, underpinning expectations that the ECB would keep the option of further policy firming on the table.
In contrast, the Japanese Yen stayed under broad selling pressure, as the wide policy gap between the Bank of Japan (BoJ) and other major central banks continued to weigh on the currency. According to a Bloomberg report on Wednesday, the BoJ was prepared to speed up its monetary normalization process, but investors responded with caution and skepticism, limiting any support for the JPY.
Technical Picture: Uptrend Intact as Overbought Conditions Ease
EUR/JPY was last seen around 186.44, consolidating after reaching overbought territory while maintaining an overall bullish structure. On the 4-hour chart, the Relative Strength Index (14) stood at 65, still within a positive zone, and the Moving Average Convergence Divergence (MACD) line remained marginally above the signal line, indicating that upward momentum remained constructive.
Selling pressure has so far been capped in the region of the mid-June highs near 186.30, preventing a deeper move toward last week’s highs around 186.00 and Tuesday’s low at 185.78. On the upside, initial resistance was identified at the intraday high of 186.65, which also aligned with the 161.8% Fibonacci extension of the rally recorded between June 21 and June 22.
Above that level, the next objective was seen in the band between the 261.8% Fibonacci extension of the same June 21-22 advance at 187.44 and the April 30 high at 187.55.
Euro Performance Against Major Currencies
The table below summarizes the percentage change of the Euro against major currencies today. According to these figures, the Euro showed its strongest performance versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | 0.02% | 0.13% | -0.05% | -0.03% | 0.31% | 0.04% | |
| EUR | 0.00% | 0.03% | 0.15% | -0.05% | -0.02% | 0.36% | 0.04% | |
| GBP | -0.02% | -0.03% | 0.11% | -0.09% | -0.06% | 0.32% | 0.01% | |
| JPY | -0.13% | -0.15% | -0.11% | -0.20% | -0.17% | 0.17% | -0.11% | |
| CAD | 0.05% | 0.05% | 0.09% | 0.20% | 0.02% | 0.37% | 0.08% | |
| AUD | 0.03% | 0.02% | 0.06% | 0.17% | -0.02% | 0.37% | 0.09% | |
| NZD | -0.31% | -0.36% | -0.32% | -0.17% | -0.37% | -0.37% | -0.30% | |
| CHF | -0.04% | -0.04% | -0.01% | 0.11% | -0.08% | -0.09% | 0.30% |
How to Read the Currency Heat Map
The heat map presents the percentage changes of major currencies relative to one another. The base currency is listed in the left-hand column, and the quote currency appears along the top row. For instance, selecting the Euro from the left column and moving horizontally to the US Dollar column shows the percentage change for EUR (base)/USD (quote).
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