Key Levels Hold on EUR/JPY Despite ECB Decision

Today’s ECB interest rate decision delivered a 25 basis point cut, as widely anticipated. The move lacked the surprise element seen earlier with the Swiss National Bank, which cut 50 basis points instead of 25, causing notable volatility. For the euro, however, the reaction has been more subdued, with limited fluctuations compared to typical interest rate decision sessions.

Technical Outlook on EUR/JPY

• Key Support Zone:
  The EUR/JPY pair is currently testing a critical support level at 159.3, marked by a blue horizontal support and the black uptrend line (lower boundary of a channel-up formation). These overlapping supports present a strong defense zone for buyers.
• Reversal Attempt:
  The price action shows signs of a reversal at this support zone. A long tail on the hourly candlestick indicates that buyers are stepping in to defend the level.
• Positive Sentiment:
  As long as the price remains above the support, the sentiment stays bullish, and buyers may target higher levels within the channel.
• Bearish Alternative:
  If the price closes below the blue support and the black uptrend line, it would trigger a sell signal and indicate a potential bearish breakout. However, this scenario appears less likely at the moment given the visible buying interest.

Summary

The combination of the blue horizontal support and the channel-up formation’s lower boundary makes 159.3 a critical level to watch. Buyers seem to be taking advantage of this zone, attempting a reversal. A daily close above these supports reinforces the positive sentiment, while a break below would change the outlook to bearish.

Source: https://www.axiory.com/analytics/technical-analysis/key-levels-hold-on-eur-jpy-despite-ecb-decision