The EUR/JPY cross is strengthening toward the 185.20 level in early European trading Wednesday as the Euro gains ground against the Japanese Yen ahead of Thursday’s European Central Bank policy meeting. Market participants are pricing in expectations of a rate hike from the ECB at its June gathering, providing support for the Euro and driving the pair above the 185.00 threshold.
The move higher comes as traders position themselves ahead of what could be a pivotal monetary policy decision from Frankfurt. The bullish trend in EUR/JPY appears to be consolidating at these elevated levels, suggesting market participants are awaiting confirmation from the ECB before committing to further directional moves. The immediate impact is being felt across European forex markets as volatility increases in Euro crosses.
FXnCO Insight
Traders should prepare for heightened volatility in EUR/JPY around Thursday’s ECB meeting, with positions above 185.00 vulnerable to rapid reversals if the central bank disappoints hawkish expectations.
Source: FXStreet