Forex: EUR/JPY erases rally on Draghi’s talk about deposit rates

FXstreet.com (Barcelona) - The ECB refi rate cut by 25bp to 0.50%, with on the marginal lending facility down by 50bp to 1.00%, triggered a rally from 128.00 to 129.91 high. However, the EUR/JPY has just pulled back and erased the rally after ECB President Mario Draghi saying that he is open to negative deposit rates at the press conference. Quickly, the market reached as low as 127.88 low, but the 128.00 area continues to support the cross.

Draghi said the ECB is technically ready for negative deposit rates and stands ready to act if needed. Incoming data and developments will help the central bank to decide next move.

Mataf.net analysts point to resistance at 128.30, 128.90 and 129.40. On the downside, supports might be found at 127.75, 127.15 and 127.00.