EUR/JPY: May highs at 125.80 in target

Currently, EUR/JPY is trading at 129.66, down -0.17% on the day, having posted a daily high at 130.42 and low at 129.52.

EUR/JPY is down but stabilising while US stocks are mixed ahead of the FOMC minutes in an environment of where the broader tone remains key for JPY given the absence of any meaningful response to the release of stronger domestic industrial production data overnight. 

ECB: Number of credit institutions headquartered in EU decreased to 3,154 in March 2017

"ECB President Draghi is in focus amid rumours of plans to maintain a steady tone at his upcoming speech in Jackson Hole. The rumours would be keeping in line with the messaging from the most recent policy meeting in which tapering / normalization discussions were set to be delayed from September to October," explained analysts at Scotiabank.

EUR/JPY levels

Analysts at Commerzbank explained that EUR/JPY has severed its uptrend and remains under pressure "Resistance line is at 130.11 despite its current short term bounce. It is has held the initial test of 128.04 but provided that rallies stay below the 130.00 mark on a daily chart closing basis the cross will remain directly offered. Intraday rallies are indicated to terminate circa 130.00/76. Below 128.00 we look for slippage to the previous May high at 125.80. Where are we wrong near term? Initial resistance at 130.00 (minor psychological level) guards the recent high at 131.40. Only above here would re-introduce the 134.32/61.8% of the move down from 2014," explained the analysts.