Listen to the latest market mood for the EURJPY pair.
The outlook for the EUR is weak as the EU economy is expected to suffer from ongoing government lockdowns and any return of a COVID19 outbreak will weigh further on the eurozone. Furthermore, constitutional problems between the ECB and the German Constitutional Court are negative for the eurozone project as a whole and therefore have been weighing on the euro. The German Constitutional Court ruled on the ECB’s Public Sector Purchase Programme that the ECB has 3 months to prove it was a ‘proportionate’ response.
The outlook for the JPY is strong as COVID19 fears, US-China tensions re-emerging, and worries over companies earnings hit by COVID19 all support the JPY.
- Therefore, we expect EURJPY sellers from pullbacks over the coming months.
- We expect this outlook to play out over the next 2-4 months
- The main risk to this outlook remains to be any positive news for the eurozone or positive news that the ECB and the GCC have solved their constitutional issue.
- Any positive COVID19 news on a new treatment or vaccine will invalidate this outlook.