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EUR/JPY: better bid in weak dollar eviroment

FXStreet (Guatemala) - EUR/JPY has got a lift in a weak greenback environment while the Yen has been uneventful within a narrow range of 20 pips opposed to EUR/USD having a good crack on the 1.06 handle making over half a cent better bid.

EZ data was robust in European trade giving the bulls a head-start before the greenback tried to fend off the demand, however, the US session was not kind to the dollar with the weakest set of PMI's in manufacturing since 2009 displayed in the ISM data.

Overall, in 'normal' markets, the euro would be unlikely to be able to maintain its current stance with the forthcoming ECB that is widely expected to act aggressively in the face of waning inflation pressures, despite much of the decision to act already priced in, EUR/USD's upside is limited on the basis of divergence between the Fed and ECB. On the other hand, a buy the rumour sell the fact may apply to the FOMC and as we progress over to 2016 and through Q1, the BoJ may also be another supporting factor if they have a harder time convincing markets that it doesn't need to ease further in order to reach its 2% inflation target in the given time frame.

EUR/JPY levels

However, for the time being the cross is technically, Valeria Bednarik, chief analyst at FXStreet explained, "In the 4-hours chart, the RSI indicator maintains its bullish slope around 58, while the Momentum indicator consolidates in positive territory, indicating some further gains ahead, up to the 131.30 region, a key static resistance area."

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