Forex: EUR/JPY retraces 60 pips back to 119.50, still lower on the day

FXstreet.com (Barcelona) - The EURJPY, like the USDJPY, is slowly retracing losses made earlier and distancing itself from the low made on the European opening, at 118.89, as it tested the 119.00 mark for support. The cross is currently trading circa 119.50, -0.38% lower on the daily chart.

Market focus is the BoJ policy announcement due on tomorrow's Asian session, with further notable easing of monetary policy with the help of bond purchase (consensus: increase by JPY 10 trillion) expected, as well as a potential lift of the inflation target.

The BoJ is then overshadowing the Eurogroup/Ecofin meeting taking place today. "We expect to see discussions on aid forCyprus, the financial transaction tax, andwatering down furtherthe June 2012 pledge to "break the vicious circle between banks and sovereigns", wrote analyst Alvin Pontoh, also expecting Juncker's replacement to be named today.

"The long-term technical configuration favours further strength towards the strong resistance at 123.33 (11/04/2011 high)", wrote MIG Bank analyst Bijoy Kar, adding that "the hourly support at 119.06/119.03 (intraday low) is challenged", with other supports at 118.04 (intraday high) and 116.47. "A resistance is at 120.71", Kar said.