EUR/JPY: Gains seem likely to reverse – SocGen

EUR/JPY surged to nearly 160. Economists at Société Générale expect the pair to turn back lower. 

A dovish ECB hike may keep the Euro under pressure

Since start-August, EUR/USD has been stuck below 1.10, and a last 25 bps hike to 4% is expected next month. But the ECB also reckons that Euro area core inflation has probably peaked, so a dovish hike may keep the Euro under pressure. 

With EUR/JPY heading towards 160, the bullish forces are running out of steam and gains seem likely to reverse.