The EUR/JPY pair declined 0.08% on Wednesday, breaking below its 100-day simple moving average and setting sights on the 183 level as mounting intervention fears weigh on the cross. The pullback comes as market participants grow increasingly concerned that Japanese authorities may step into foreign exchange markets to support the yen, while fresh economic data showed Japan’s producer price inflation surged past the 3% threshold, exceeding analyst expectations.
The stronger-than-anticipated producer inflation figures add weight to potential Bank of Japan policy normalization, further bolstering the yen against the euro. Traders are now watching the 183 handle closely as the next technical support level, with the breach of the 100-day SMA signaling potential for additional downside momentum. Currency dealers and brokers should monitor Japanese official commentary closely for intervention signals, particularly if the yen strengthens rapidly against major crosses.
FXnCO Insight
Position for further EUR/JPY downside toward 183 while maintaining tight stops above the 100-day SMA, as intervention risk and hawkish BoJ repricing create a bearish technical and fundamental setup.
Source: FXStreet