Characteristics of the currency pair: EUR / JPY (Euro - Japanese yen)

The currency instrument EUR/JPY is a synergy of the two strongest world economies. This quote is very popular among modern traders.

This is primarily due to the high volatility of the pair, which can provide a large stable stream of profits if trades are opened correctly. High volatility rates here are provided by the Japanese currency.

General characteristics of the tool

This pair is a cross quote, which means the sale or purchase of the European currency for the yen. Thus, if the quote price is 118.60, then this means that 1 euro is worth 118.60 yen.

This currency instrument is most often called a currency haven and is often compared with the USD/CHF pair, which is a fairly conservative quote.

This instrument is characterized by a rather high spread of 4-6 pips. This is due to the fact that the method of currency recalculation is not made directly, but goes through the US dollar.

If we add to this the rather high volatility of the pair, then we can say with confidence that trading on EUR/JPY is considered quite risky.

That is why trading beginners are not recommended to open deals on this quote without relevant experience and knowledge.

Analytics and possible influencers

When talking about such a quote as EUR/JPY, one should pay close attention to the release of the nearest economic news regarding the European Union and Japan.

However, only news analysis is often not enough, in this case, you should understand the subtleties of the technical approach to trading.

Armed with this knowledge, you can get good performance in predicting the movement of a currency pair and further profit.

It is important to take into account that over the past few years, the Japanese central bank has carried out an artificial inventory for depreciation of the yen several times.

Such a policy lies in the fact that large corporations of the country of the rising sun are unprofitable for a strong appreciation of the currency, since companies that mainly live off exports in this case suffer serious losses.

The factors that have the greatest impact on changes in the exchange rate of a currency pair are: consumer demand, unemployment, inflation, as well as interest rates of the currency ratio.

When forming a certain trend, the aggregate of interest rates is taken into account

Central banks of the European Union and Japan. In the case when the ECB maintains a tough aggressive interest rate line, the demand for the European currency increases significantly.

This principle also has the opposite effect in the case of a more aggressive interest rate of the Central Bank of the country of the rising sun, the demand for the purchase of the yen noticeably increases.

EUR/JPY chart

A live chart for the EURJPY currency pair is an ideal solution for those who do not want to install MT4 for analysis.


Technical analysis

Trading the EUR/JPY currency pair

The highest volatility, as well as a large volume of transactions for this trading instrument, falls on the Asian trading session. Moscow time is from 01:00 to 10:00.

Quite often, sharp movements of the currency in one direction or another are observed from 09:00 to 10:00, when the Asian and European trading sessions intersect.

The EUR/JPY currency pair is characterized by a long trend movement, which favorably contributes to the opening of long-term deals on this instrument.

The following indicators can provide successful trading: Momentum, moving averages, and MACD. Due to the peculiarities of the currency instrument for trading, you can limit yourself to only a moving average, which almost always gives accurate signals for entering the market. Thus, the following examples for opening trades can be identified:

  • The crossing of the moving average by the price, as a rule, signals the nearest price growth;
  • Reverse price movements signal the possibility of opening sell trades.

Since 2012, the central bank of Japan has begun a policy to depreciate the national currency, this was necessary to support exporting companies. The quote had a long growth for 3 years, after which the price immediately rebounded.

Features of the currency pair

The EUR/JPY pair is characterized by some features, namely:

  1. The trading instrument correlates quite well with the EUR/GBR currency pair.
  2. Over one hundred points can be traded in one trading day. The record value was 600 points in one day.
  3. When trading a currency instrument, the movement of pairs such as EUR/USD and USD/JPY should be taken into account.

Trading Methods

As already mentioned above, the currency pair has a high volatility, which allows experienced traders to quickly gain a profitable profit. The pair is characterized by a strong dependence on the release of important fundamental news, which can often explode the market.

To trade this instrument, we can recommend the following actions:

  • During periods of absence of important fundamental news and events on the forex economic calendar, trading is carried out using technical analysis and selected indicators.
  • If the economic calendar contains the release of important statements by leading politicians or the publication of significant news data, trading can be carried out by creating pending orders.
  • Also, a currency pair is characterized by a constant trend movement with a given rate, which is why you can open long-term deals in the direction of a moving trend, regardless of the economic calendar. However, during periods of publication of monthly, quarterly or annual reports, the trend may change its direction, which is why you should refrain from opening transactions during such periods.
  • It is allowed to conduct intraday trading by scalping a small number of points, since in some cases the currency can behave unpredictably.
  • For trading on the EUR/JPY currency pair, it is better to give up big risks, using only a small percentage of your deposit for work, since in rare cases the pair can demonstrate an instant rise or fall, which will significantly reduce your deposit or bring it to zero.

Brief summary

Summing up about such a currency instrument as EUR/JPY, we can say with confidence that trading this pair has certain risks, however, an experienced trader will be able to extract big profits with competent and timely opening of transactions.

As for newcomers to the foreign exchange market who have not yet had time to fill their bumps on merged deposits and on unprofitable intraday trading, they are advised to stick to opening long sessions with a small cost per trade.

Since the EUR/JPY currency pair can be unpredictable and drain your entire deposit due to any important economic event, provided that you entered a trade with a large lot, which only experienced stock trading gurus can afford in the forex market.

Enter the market correctly and over time your profits will grow exponentially. Regarding the EUR/JPY pair, it is always better to follow the trend than to take risks on scalping strategies.

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