EURJPYThe upcoming fundamental data and events that could affect the EUR/JPY trade directional bias include:
Eurozone Flash PMIs (February 21, 2025):
Manufacturing PMI: Expected to provide insights into the health of the manufacturing sector.
Services PMI: A strong services sector can bolster the euro, while weakness may lead to bearish sentiment.
Impact on EUR/JPY: Stronger-than-expected PMIs could support the euro against the yen, leading to a bullish bias for EUR/JPY. Conversely, weaker PMIs might lead to a bearish outlook.
Bank of Japan (BoJ) Monetary Policy Meeting (February 19, 2025):
The BoJ's stance on interest rates and inflation will be closely watched. Recent GDP growth data indicates a robust economy, which may lead to speculation about potential rate hikes.
Impact on EUR/JPY: If the BoJ signals a more hawkish approach or hints at future rate increases, it could strengthen the yen against the euro, resulting in a bearish bias for EUR/JPY.
European Central Bank (ECB) Commentary:
Recent comments from ECB officials regarding potential rate cuts may weigh on the euro.
If the ECB maintains a dovish stance while the BoJ turns hawkish, this could lead to further declines in EUR/JPY.
Current Market Sentiment. The recent decline following Japan's robust GDP report indicates a stronger yen, which may continue if economic data supports this trend.
The bearish sentiment towards EUR/JPY due to deteriorating Eurozone growth expectations relative to Japan.
Technical Analysis
Support and Resistance Levels: The pair is currently testing key support levels. A break below these levels could trigger further selling pressure.
Conclusion
The directional bias for EUR/JPY next week will largely depend on the outcomes of the Eurozone PMIs and the BoJ's monetary policy meeting. Strong economic indicators from Europe could bolster the euro, while hawkish signals from Japan may strengthen the yen. we will closely monitor these developments and adjust our positions accordingly based on market reactions to key data points.
