EUR/JPY: headed for a test of the 200-WMA?

• EUR/JPY: downside opening up to recent lows of  129.35?
• EUR/JPY: slapped on ECB tweaks to statement.

EUR/JPY has been moving in a steep decline with the yen holding below the 106.20/30 resistance line vs the dollar and the euro slapped down to test the 1.23 handle in a move that has accumulated around 140 pips to the downside since the ECB announcements.

Currently, after a marginal hawkish change in the ECB's statement today, EUR/JPY is trading at 130.53, down -0.87% on the day, having posted a daily high at 132.01 and low at 130.52. 

Key takeaways from ECB meeting (Source : Rabobank)

• The ECB left its interest rates, quantitative easing and forward guidance untouched.
• The slight changes in the staff projections were mainly technical of nature, and the new forecasts did not materially change the ECB’s earlier outlook.
• The gradual evolution of the economy along the lines of the ECB’s outlook gave the Council the confidence to remove the easing bias from its asset purchase programme.
• To us, this marginal change in the statement is the precursor of a more substantial revision of the communication strategy in summer, before the ECB unwinds QE altogether by end-2018.

EUR/JPY levels

The 200-week ma at 129.59 is now in view and the recent low at 129.35. "It will need to regain last week’s high at 132.18 in order to negate the move lower and to retarget the high from the 21st February at 133.06 and the 55-day ma at 133.98", analysts at Commerzbank explained, adding, "Intraday Elliott wave counts are positive. Initial support lies at 130.60 ahead of 129.59/35. Where are we wrong near term? Below 129.35 lies the 127.27 August 2017 low."