Technical Bias: Neutral
Key Takeaways
- Euro broke an important resistance area against the Japanese yen recently which could trigger a rally moving ahead.
- 136.80 level must hold if the EURJPY pair has to continue trading higher.
- EURJPY support seen at 136.80 and resistance ahead at 138.25.
The Euro buyers managed to push the shared currency higher against the Japanese yen, and if the momentum continues then more gains are possible in the short term.
Technical Analysis
There was a critical bearish trend line formed on the daily timeframe for the EURJPY pair, which was breached recently. However, the pair dropped again, and is currently testing the same broken trend line. There is a chance that the pair might find support around the 136.80 level, but for this to happen there should be no daily close below the highlighted trend line. If the pair bounces from the 136.80 support area, then initial resistance can be seen around the 50-day simple moving average (SMA), followed by an important confluence area of 100-day SMA and the 38.2% Fibonacci retracement level of the last drop from the 142.37 high to 135.71 low. The only negative point to note from the charts is that the RSI has breached the 50 mark, which encourage the Euro sellers in the short term.
If the pair closes below the 136.80 support area, then a move towards the last low of 135.70 is possible moving ahead. A break and close below the mentioned area might call for a test of the 135.00 support level.
German GFK Consumer Climate
Today, during the London session the German GFK consumer climate data will be published. The Forecast is of no change from the previous reading. If the outcome misses the mark, then the Euro might move lower in the short term.
Overall, if there is no daily close below the 136.80 level, there is a chance that the pair might find buyers.
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