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EUR/JPY bulls riding bank divergences and risk sentiments

FXStreet (Guatemala) - EUR/JPY is trading at 143.03, up 0.30% on the day, having posted a daily high at 143.47 and low at 142.36.

EUR/JPY has been a strong performer in a weak Yen environment, with it eroding the 142.45 May high. Regardless of the poor data results in the European shift from Europe and weak EUR/USD capped at 1.2500 ahead of tomorrows ECB, the cross has taken advantaged of the BoJ’s recent actions and dovish rhetoric in speeches while also benefitting from movements in the US that has weighed on the Yen. Technically this leaves the pair exposed to further upside pressures targeting the 143.79 March high as pointed out by Karen Jones, chief analyst at Commerzbank.

“The market remains bid and this break targets the 143.79 March high and 144.84 – the 35 year resistance line, where we look for it to fail…We will assume an upside bias while above 137.05, the low seen on the 30th October. Below here will neutralise the chart again”.

Meanwhile, the divergence between the ECB, BoJ and the Fed is compelling and favours a stronger dollar, weaker Yen and a weaker euro vs the greenback. However, in current risk sentiment markets, it is the yen that is getting the worse deal on the back of current events in the US. With The Republicans gaining control over both the House and Senate in the US mid-term elections, for instance, the yen suffers as this is seen as pro business in the US which is good for stocks and bad for the yen.

EUR/JPY noteworthy levels

Spot is presently trading at 143.03, and next resistance can be seen at 143.26 (Daily Classic R2), 143.47 (Daily High), 143.58 (Weekly Classic R2), 143.88, (Daily Classic R3) and 144.81 (YTD High). Support below can be found at 142.93 (Daily Classic R1), 142.91 (Hourly 20 EMA), 142.65 (Yesterday's High), 142.60 (Daily Open) and 142.60 (Monthly High).

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