As it waits for the August inflation statistics for the Eurozone on Thursday morning, the EUR/JPY reveres from its highest level since 2008. The cross-currency pair then reverses course from a nine-week-long rising resistance line, updating the intraday low to 159.30 by the time of publication.

Having said that, the ECB’s preferred inflation indicator, the Harmonized Index of Consumer Prices (HICP), together with the initial readings of the Eurozone Consumer Price Index (CPI) for August, will be used to guide intraday adjustments. Given the recent difficulties faced by the world’s central bankers, a surprise increase in inflation may enable the EUR/JPY to regain its multi-year high.

It’s important to note that the sluggish MACD signals cast doubt on the pair’s potential for additional appreciation, and as a result, negative inflation cues won’t hold back in pushing the quotation towards the 158.50 support area, which includes the 10-DMA and an ascending support line from late July.

The Bank of Japan’s (BoJ) dovish bias, together with the RSI (14)’s firmer, non-overbought reading, has established a floor under the EUR/JPY prices near 158.50; a break of which would challenge the previous weekly high of about 156.85.

Above all, the purchasers of the pair are optimistic until they see a clear downside break of a four-month-old rising support line, at the very least near 153.70.
Above all, the purchasers of the pair are optimistic until they see a clear downside break of a four-month-old rising support line, at the very least near 153.70.
On the other hand, confirmation of the EUR/JPY pair’s recovery is required by the nine-week-old rising resistance line, which is near the 159.80 level as well as the 160.00 barrier.

The June 2008 low of around 161.80 will then be highlighted.

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