EUR/JPY hits multi-year high following Fed decision EURJPY Crosses
hursday’s European Central Bank decision, where 25 basis points is priced in, German bond yields are rising, giving further traction to the Euro.The Federal Reserve announced on Wednesday that it will hold its rates steady, to enable the members of the Federal Open Market Committee to evaluate further information regarding its impact on. In addition, the terminal rate was revised upwards to 5.6%, suggesting that more rate hikes are on the horizon.
As a reaction, the 10-year US bond yield spiked to a daily high of 3.85% following the statement and stabilised around the 3.80% area following Chair Powell’s presser. For Thursday's ECB decision, a 25 bps hike is fully priced in and looking forward, the market has already priced in a 25 basis points hike either in July or September. Meanwhile, economic weakness and decelerating inflation in the Eurozone, seem to be giving the doves the upperhand so investors will keep an eye on the economic outlook of the bank and Madame Lagarde’s comments.
That being said, the German yields saw gains across the curve on Wednesday. The 10-year bond yield rose to 2.46%, while the 2-year yield stood at 3.09% and the 5-year yielded 2.54%.for the short term as the Relative Strength Index and Moving Average Convergence Divergence both suggest that the buyers are in control while the pair trades above its main moving averages.
Upcoming resistance for EUR/JPY is seen at the zone of around 152.00, followed by the area at 152.50 and the psychological mark at 153.00. On the other hand, in case the EUR/JPY loses more ground, support levels line up at 150.80 and below around the 20-day Simple Moving Average at 149.90 and the 149.00 area.
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