• After the ECB held rates unchanged, the euro rallied courtesy of the jump of the 2-year German Bund.
  • ECB’s Lagarde said that the central bank would not hike rates until they completed the QE program.
  • EUR/JPY is upward biased, as it broke the daily moving averages (DMAs) after the ECB’s monetary policy decision.

On Thursday, the shared currency advances as the North American session begins vs. the low-yielder Japanese yen, up 1.18%. At the time of writing, the EUR/JPY is trading at 130.88. The market sentiment is mixed, spurred by monetary policy decisions by the Bank of England (BoE) and the European Central Bank (ECB), which concerns the currency pair.

ECB held rates unchanged while the QE persists as scheduled

The ECB kept its deposit rates unchanged at -0.5% while emphasizing that the QE would end in March, when the APP will be lifted to €40 billion per month, followed by a reduction to €20 billion by Q4. The bank also reaffirmed its guidance that QE purchases would end before any increases to interest rates.

Read more: Breaking: ECB leaves rates unchanged, maintains guidance on interest rates and QE

At the ECB press conference, ECB President Christine Lagarde said that “We [ECB] will not hike rates until we have completed net asset purchases, will determine in March what we will apply to these net asset programs for the rest of 2022.” Nevertheless, Lagarde did not say that a rate hike in 2022 is unlikely.

That said, the EUR/JPY skyrocketed near 131.00 on the ECB’s monetary policy decision, which came in line with expectations. However, the 14 basis points jump in the 2-year German Bund spurred demand for the euro, to the detriment of the safe-haven status of the Japanese yen.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY daily chart depicts an upward bias. During the ECB’s monetary policy decision, it breached all the daily moving averages (DMAs) upwards. It faced resistance at a five-month-old downslope trendline, drawn from October 2021 highs that pass around 131.00.

To the upside, the first resistance would be the trendline mentioned above that looms around 131.00. An upside break would expose January 5 daily high at 131.60, followed by 132.00.

This article was originally published by Fxstreet.com.Read the original article here.

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