Key Highlights
Euro traded higher recently against the Japanese yen, but failed to overtake a major resistance at 128.50-70.
EURJPY has formed a sliding channel, which if breached might ignite moves in the short term.
German Economic Sentiment will be published by the ZEW today, which is forecasted to increase from 54.8 to 55.5.
Technical Analysis
The Euro surged higher recently against the Japanese yen until it found sellers around the 128.70 area, which caused a downside reaction. There is a sliding channel formed on the hourly chart of the EURJPY pair, which is acting as a major barrier. There are more than three failures noted around the channel top, which points to the importance of the channel. However, there are many supports on the way down. One crucial point to note is that the 100 and 200 hourly simple moving averages are on the downside around the channel support area.
Moreover, the 38.2% fib retracement level of the last leg from the 126.26 low to 128.75 high is also aligned the mentioned support area. In short, there could be a lot of buying noticed around 127.80 levels if the EURJPY moves lower from the current levels. The hourly RSI is above the 50 level, which is a positive sign in the short term.
German ZEW Economic Sentiment
Today during the London session, the German Economic Sentiment pointing to the institutional investor sentiment, which reflects the difference between the share of investors who are optimistic and pessimistic will be published by the ZEW. The market is expecting the ZEW Economic sentiment to increase from the last reading of 54.8 to 55.5 in April 2015. Moreover, the Euro Area ZEW Economic Sentiment is also expected to rise from 62.4 to 63.7.
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