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Recovers After Double-Whammy Of ECB Headlines


ECB headlines hit the eurozone's shared currency with a double-whammy on Wednesday, but EUR/JPY managed to recoup losses in the second half of the day. The rate took a hit in the European morning as ECB's Knot said that the ECB has tools to counter EUR appreciation if needed. It extended losses as BBG reported that ECB policymakers have agreed to push back against scepticism that further rate cuts remain on the table. EUR/JPY bottomed out at Y125.60 and bounced into the WMR fix, rallying past neutral levels amid possible profit-taking.

  • ECB's Centeno gave an interview to RTP3, warning that the health and economic crises cannot transform into a financial crisis, as "that risk is always latent."
  • After another failure to close under its 50-DMA, EUR/JPY trades +7 pips at Y126.16. A clearance of Jan 22 high of Y126.40 would bring Jan 7 high of Y127.49 into view. Conversely, losses past yesterday's low of Y125.60 would turn focus to Y125.09, which represents the low print of Jan 18.
  • Flash German CPI, final EZ sentiment gauges, Italian consumer/m'fing confidence and comments from ECB's Schnabel take focus in the eurozone today.

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