Sell EUR/JPY at 128.75 – Westpac

Analysts at Westpac are recommending to sell the EUR/JPY cross at 128.65 level for the target price of 126.65, while maintaining a stop loss of 129.45.

Key Quotes

“Rationale:

• ECB staffer’s updated projections at the December meeting will be key for ECB policy through 2019. Data has persistently undershot ECB’s path leaving their targets far from being achieved. Slower global growth, lack of substantial Eurozone reforms and lower internal demand all suggest that growth will remain low, despite firmer Eurozone employment data.
• ECB’s forward guidance may well be extended beyond the “end of summer” in terms of a potential rise in key rates.
• EU is likely to be restrictive and punitive on potential breaches of national budget guidance from France and Italy.
• EUR/JPY has been steady despite large risk sentiment swings around US-China trade tensions and going forward may remain insulated from a range of potential outcomes on this front. • The sharp fall in global yields should exert a gravitational pull on EUR/JPY.”