EUR/JPY clings to gains ahead of BoJ’s decision

• EUR/JPY trades near the top of the Ichimoku Cloud, with first support at 158.00.
• German GDP contracts less than expected, while inflation dips sharply.
• Potential tweaks in BoJ's Yield Curve Control could impact the pair's future trajectory.

EUR/JPY clings to Monday’s gains on Tuesday, in the early Asian session, following Monday’s session, which witnessed the pair reaching a daily high shy of the 159.00 figure, to witness the pair closing at around current exchange rates. At the time of writing, the EUR/JPY is trading at 158.26.

EUR/JPY Fundamental summary

The Eurozone (EU) economic docket witnessed that inflation in Germany dipped sharply, suggesting the latest European Central Bank (ECB) decision of holding rates could be the first pause of many, with the economies across the bloc stagnating. In that regard, Germany’s GDP for Q3 contracted less than expected but printed a negative reading.

On the Japanese Yen (JPY) front, a news piece by Nikkei reported the Bank of Japan (BoJ) could likely tweak its Yield Curve Control (YCC). Consequently, market participants bought the Yen in anticipation of Today’s BoJ monetary policy decision.

EUR/JPY Price Analysis: Technical outlook

The daily chart portrays the pair trading near the top of the Ichimoku Cloud (Kumo) after buyers failed to reclaim the Tenkan-Sen at 158.79. A breach of that exacerbated the EUR/JPY’s fall to the current week’s low of 157.69, which lies inside the Kumo. The EUR/JPY first support would be 158.00, followed by the 157.69. Once cleared, up next would be the Kijun-Sen at 157.12, ahead of 157.00, before prices tumble to the base of the Kumo at 155.61. Conversely, if buyers stepped in, the Tenkan Sen would first resist, followed by the 159.00 figure.

EUR/JPY Price Action – Daily chart