EUR/JPY weakening below 133.00 post-ECB rate decision

• Without surprise, the ECB leaves its overnight rate unchanged, focus now shifts to the ECB press conference at 12:30 GMT.

• EUR/JPY is weakening below the 133.00 handle as the negative sentiment on the EUR might be exacerbated by Draghi’s dovish comments.

The EUR/JPY is trading at around 132.85 down 0.17% on Thursday as the ECB leaves its target rate for overnight deposit with commercial banks unchanged.

As it was widely expected there is no change on the interest rate front. The European Central Bank (ECB) keeps the interest rate on the main refinancing operations at 0.00% while the interest rate on the marginal lending facility stays at 0.25% and the deposit facility at -0.40%. 

Additionally, The Governing Council says that the Asset Purchase Program (APP) will keep running until the end of September 2018. However, if the inflation target of 2% is not reached by then the ECB can extend the APP beyond September 2018 if deemed necessary. 

The focus will shift to the ECB press conference at 12:30 GMT. Traders will pay attention to any dovish comments which can compound an already fragile sentiment of the euro. Growth, inflation, trade wars and the euro strength are a concern and Draghi will give clues (or not) to what will coming next.

EUR/JPY technical outlook:

The EUR/JPY is looking weak now trading in the 132.80 area after failing to break above the 133.00 level. Resistances are seen at 133.00 figure and 133.50 swing high while supports are priced in at 132.50 demand zone and 132.00 swing low.