EUR/JPY reaches strongly oversold levels at the 156.00 area

• Hopes that the BoJ will exit its-ultra-loose policy have boosted the Yen.
• BoJ governor Ueda meets the Japanese PM after discussing options for a major policy shift.
• The Euro might see some recovery from heavily oversold levels.

The Euro extended losses on Thursday, with the Japanese Yen boosted by speculation about a BoJ pivot which has pushed the pair to two-month lows ruth below 156.00, with RSI showing oversold levels in most timeframes.

Ueda’s comments fuel hopes of a BoJ pivot

Investors have ramped up bets that the Bank of Japan would be ready to put an end to its negative rate policy after Governor Ueda commented the diverse options available to exit its ultra-loose policy.

Somewhat later the head of the Japanese Central Bank visited Prime Minister Kishida, which boosted hopes that the bank might signal the policy shift at December’s meeting.

In contrast, the dovish remarks from ECB member and Governor of the Bank of France, François Villeroy have heightened hopes that the European Central Bank has reached its terminal rate, adding negative pressure on the Euro.

Technical indicators show the pair under strong bearish pressure although the strongly overbought levels allow for a corrective rebound. Resistances are at 157.00 and 157.75. Supports remain at 155.55 and 154.20.

Technical levels to watch