EUR/JPY: lack of directional strength ahead of BoJ - FXStreet

Valeria Bednarik, chief analyst at FXStreet, notes that the EUR/JPY pair is extending losses as the Japanese currency keeps strengthening ahead of the BoJ monetary policy meeting that will take place during Wednesday's Asian session.

Key Quotes:

"There's a good possibility, however, that the Central Bank will end up surprising investors -see USD/JPY analysis for more details- and therefore that the JPY will weaken sharply over the upcoming session. In the meantime, and according to technical readings, the 4 hours chart shows that the price was unable to recover above the 50% retracement of its latest daily rally, around 113.90, with short-lived spikes beyond it being quickly retraced."

"Also, and in the same chart, the price is below the 100 and 200 SMAs, whilst the technical indicators hold within bearish territory, lacking clear directional strength. This week low has been established at 113.45 on Monday, being the immediate support. Further declines beyond it expose the 112.70 level, another strong Fibonacci level, while beyond 114.00, the rally can extend up to the 115.00 price zone."