European Union (EU) hardliners are reportedly ready to accept EUR 390 billion in grants on corona virus recovery fund. This comes after the earlier Reuters report that the Frugal Four are ready to accept EUR 390 billion in grants and EUR 360 billion in loans. Austrian Chancellor Sebastian Kurz tweeted out on Monday, the European Union (EU) Summit discussions are difficult but we can be very satisfied with today’s result. Meanwhile, Dutch Prime Minister Mark Rutte said, “on the whole, we are making progress in EU summit.”

Diplomats said the leaders may abandon the summit and try again for an agreement next month, but as they negotiated into the early hours of Monday a deal still looked possible.

“I don’t know what to expect from the summit. But even if there is no agreement, the impact will be limited given the euro appears to have a fairly strong momentum these days,” said Yukio Ishizuki, senior strategist at Daiwa Securities.

On the other hand, minutes of the latest BOJ meeting suggest that the policymakers may face less economic risks due to the heavy fiscal support. However, fears of the coronavirus (COVID-19) keep the broad outlook uncertain. Furthermore, Japan’s trade numbers for June suggest a decline in the headline Merchandise Trade Balance and Exports but the Imports have recovered somewhat.

EUR/JPY 4 Hour Chart:

Support: 121.97 (S1), 121.63 (S2), 121.33 (S3).

Resistance: 122.62 (R1), 122.92 (R2), 123.26 (R3).

Amid all these catalysts giving an optimistic view on EUR against JPY. We expect a bullish trend for EURJPY.