The EURJPY posted gains in the last week and may have carved out a double top at around 160.
EURJPY – Daily Chart
EURJPY trades at $158.05 and may see further support to the 156 level this week.
We noted in this blog recently that the Japanese yen has always been a haven in global turmoil and should have been rallying on war. There is one issue: the country is a large oil importer. Still, there was also the risk of BOJ intervention for the currency as it continued to decline.
Germany’s economy is expected to shrink slightly in the third quarter as the global economic slowdown, central bank tightening, and higher energy prices slow its expected recovery, the economy ministry said last week. The ministry expects a moderate recovery to start at the turn of the year based on the latest sentiment indicators.
Monday into Tuesday is big on economic data for this pair, with the latest German growth figures for Q3 expected to show a -0.2% decline in the economy. That is followed by inflation for the German economy, with traders expecting another dip from 4.5% to 4%.
Those numbers will be followed by a Bank of Japan interest decision and its quarterly outlook report.
It could be a week when the Japanese yen starts to shrug off a long period of bearishness. Traders have the 160 level above as resistance for a more significant move lower to as low as 150 in the coming weeks.