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The ECB meeting today offered little fresh information to the market, but Mario Draghi clearly stressed that the risk were still skewed to the downside and that council was open to further stimulus down the road if need be. That is likely to put downward pressure on the euro, especially if tonight’s flash PMI data misses estimates.
On the other side of the world, the BOJ has tried to make it abundantly clear that they will not engage in unconventional monetary policy known as “helicopter money” and that has taken the wind out of the sails of the USD/JPY rally.
All of this suggests that EUR/JPY is likely to have topped at the 118.00 level and may now drift towards 115.00 as risk aversion flows and weaker economic data exert their influence. The pair does not have any serious support until the 114.00 level while 118.00 looks to be solid resistance for now.