EUR/JPY Stays Near One-Month High Ahead of ECB Event
- EUR/JPY keeps steady near 130.50 for a fourth straight day after gaining about 2% in two weeks
- Currency traders expect the ECB policy meeting slated for Thursday to reveal insights into stimulus reduction
EUR/JPY Steady, Euro Pushes Modestly
The EUR/JPY moved slightly to the upside on Monday as currency traders maintained their optimism toward the highly anticipated European Central Bank policy meeting.
The euro advanced moderately by roughly 15 pips, or 0.1%, against the Japanese yen on the first trading day of the week, settling near 130.40. The pair continued a sideways trading momentum that has narrated the price behavior over the last three days.
Since last week, the EUR/JPY exchange rate has been consolidated in the range between 130.15 and 130.55. On Friday, the euro spiked to a one-month high against the yen, reaching a rate of 130.75. Buying momentum, however, subsided and the pair ended the day in negative territory after a weaker-than-expected US jobs data roiled the financial markets.
EUR/JPY on Solid Upward Trend
In the short term, since August 20, the EUR/JPY pair has been in a solid upward trend, gaining around 2% to current market price of about 130.50. The strong rally to higher grounds has seen only two days in the red out of 12 trading days. Along the way, the pair breached the 200-day simple moving average, a key indicator, signaling a potential bull market defined by rising prices.
Overall, for the year, the pair has gained more than 3.3% since January. The EUR/JPY reached its highest point in 2021 near the end of May when the price spiked to a multi-year high above 134.00.
The European currency is bound for heightened volatility later in the week. On Thursday, the European Central Bank will gather for its policy meeting. ECB officials, including ECB President Christine Lagarde, will convene to discuss whether to begin dialing down the central bank’s bond purchases.
Since the pandemic began, the ECB has been buying assets worth roughly €20bn through an emergency program meant to bolster the European economy and stimulate growth during the coronavirus crisis.