The EURJPY pair continues to press higher, with the potential for Bank of Japan intervention if it continues.
EURJPY: Weekly Chart
The price of EURJPY trades at 158.30 after a strong rally in June and July. The first support level comes in at 155.50.
The Japanese yen has unemployment figures to watch ahead of Tuesday’s session, but analysts expect that to remain at 2.5%.
The European session on Tuesday will have consumer confidence data from Germany. That is forecast to be flat, but a stronger number could see a further rally in the euro.
ECB President Christine Lagarde refused to give away any clues on whether the European Central Bank should lift interest rates for the 10th straight time next month. Some of her hawkish colleagues have been trying to amplify the potential for another increase.
“It’s critically important that inflation expectations remain anchored at 2 percent,” Lagarde said in a Bloomberg interview during the central bank meeting in Jackson Hole, Wyoming. That event has often been used by policymakers to make big announcements.
But this year, Lagarde’s restraint was seen after the lack of rate hikes hurt the economy. Europe’s largest economy, Germany, is in recession, and last week saw dismal economic data from the 20-nation eurozone.
Despite weakness in the economy, the higher rate of interest on the euro has seen the yen punished, and the Bank of Japan may take action after it does so in 2022. The line in the sand for the US dollar is said to be 150.
The bank has refused to make any comment on the euro, but traders should keep an eye on the pair if it continues its ascent.
Germany will release its latest inflation figures on Wednesday, with analysts expecting a small decline in prices. The country will then report employment figures on Thursday, ahead of eurozone inflation. There will also be meeting minutes from the latest gathering of the ECB.
