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Will upcoming BoJ statement be the catalyst to take EUR/JPY above and beyond 133.00?

FXstreet.com (Barcelona) - The EUR/JPY finished the day up 55 pips at 132.29, consolidating just below the 133.00 resistance level which has basically been the top of the recent trading range established over the last eight trading sessions.

Market participants should be aware of the most recent Bank of Japan monetary policy statement due out a bit later, which could heighten volatility across the yen crosses as we progress further into the Asia session. According to Marc Chandler, Head Currency Strategist at BBH, “the BOJ's two-day meeting concludes tomorrow and no fresh initiatives are expected. The chief concern presently is the volatility of the government bond market – an unintended and seemingly unforeseen consequence of what it calls the qualitative and quantitative easing.”

So what type of signals are the charts sending ahead of the BoJ statement release? According to Val Bednarik of FXStreet.com, “slightly higher on the day, the EUR/JPY traded as low as 131.92 before bouncing with local share markets. Still yen sellers will have to face BOJ economic policy decision today, and their determination will be challenged, as no changes are expected, neither new announcements: can the yen continue falling after Amari’s words over the weekend, and an on hold stance? The fact that 200 SMA in the hourly chart is now along with 100 one in the 131.84 area suggest there was not much buying interest around, over the last few days, increasing downside risk. A break below this support should lead to a quick test of next and stronger one around 131.40 while if below this last, panic can take over the pair and push it all the way down to 130.00 over the upcoming sessions, without really affecting the long term bullish trend.”

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