Technical Bias: Bearish
Key Takeaways
Technical Analysis
There is a monster trend line on the 4 hour timeframe of the EURJPY pair, which has held the upside in the pair on a number of occasions. Recently, the pair climbed towards the mentioned trend line, but failed to break the same. Moreover, it completed five wave correction from the 135.71 low around the 139.14 level. So, there is a high probability that the pair might correct lower in three waves towards the 50% Fibonacci retracement level of the last leg from the 135.81 low to 139.14 high. The most important point is that all three simple moving averages (200, 100 and 50) – 4H are sitting around the same levels. So, the 137.50 level can be seen as the ultimate objective for the Euro sellers if the EURJPY pair moves lower.
On the other hand, if the EURJPY pair bounces from the current levels, then the last high of 139.14 might come into play. More importantly, the pair needs to break the highlighted trend line to gain traction.
Euro Zone Consumer Price Index
Later during the London session, there is an important economic release lined up in the Euro zone. The Consumer Price Index (CPI) will be released by the Eurostat for the Euro zone. The forecast is slated for a rise of 0.1% in August, compared to the last month. If the outcome disappoints, then the Euro might come under pressure in the near term.
Key Takeaways
- Euro likely has formed a short-term top against the Japanese yen, and might be heading towards the 137.50 support zone.
- 139.10-20 levels hold the key for more upside in the EURJPY pair.
- EURJPY support seen at 138.00 and resistance ahead at 139.20.
Technical Analysis
There is a monster trend line on the 4 hour timeframe of the EURJPY pair, which has held the upside in the pair on a number of occasions. Recently, the pair climbed towards the mentioned trend line, but failed to break the same. Moreover, it completed five wave correction from the 135.71 low around the 139.14 level. So, there is a high probability that the pair might correct lower in three waves towards the 50% Fibonacci retracement level of the last leg from the 135.81 low to 139.14 high. The most important point is that all three simple moving averages (200, 100 and 50) – 4H are sitting around the same levels. So, the 137.50 level can be seen as the ultimate objective for the Euro sellers if the EURJPY pair moves lower.
On the other hand, if the EURJPY pair bounces from the current levels, then the last high of 139.14 might come into play. More importantly, the pair needs to break the highlighted trend line to gain traction.
Euro Zone Consumer Price Index
Later during the London session, there is an important economic release lined up in the Euro zone. The Consumer Price Index (CPI) will be released by the Eurostat for the Euro zone. The forecast is slated for a rise of 0.1% in August, compared to the last month. If the outcome disappoints, then the Euro might come under pressure in the near term.
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