EUR/JPY stays on front foot on ECB taper talk

EUR/JPY maintains the bid tone in Asia, trading above 115.00 handle as ECB taper talk is widely seen as steepening of the yield curve across Eurozone.

Gains capped around yesterday’s high

The cross is having a tough time moving above the previous session high of 115.37 levels. The demand for the common currency strengthened in the NY session after reports hit the wires that ECB may consider trimming QE purchases by EUR 10 billion per month.

The cross currently trades around 115.30 levels, with correction in the USD/JPY capping gains in the pair. The focus today is on the services PMI releases across Eurozone ad broader market sentiment.

EUR/JPY Technical Levels

A break above 115.60 (50% of 122.00-109.205) could yield a test of supply around 100-DMA level of 115.98. A violation there would expose 117.11 (61.8% of 122.00-109.205). On the other hand, a breakdown of support at 115.00 would shift risk in favor of a drop to 114.40 (Sep 21 high) and 113.93 (50-DMA).