EURJPY At Potentially Significant Turning Point

Technical Bias: Bearish

Key Takeaways

• Euro breaks a key support against the Japanese yen, which if turns out true could ignite downside thrust in the near term.

• 50 simple moving average – 4H is a major support on the downside for the EURJPY pair.

• German GDP release is a critical event lined up later during the London session.

Euro somehow managed to gain bids Intraday against the US dollar, but failed to overcome selling pressure against the Japanese yen paving way for downside in the short term.

Technical Analysis

There was a monster trend line formed on the 4 hour chart of the EURJPY pair, which was breached recently. After the break, the pair headed towards the 50% Fibonacci retracement level of the last leg from the 142.08 low to 149.13 high where it managed to find buyers. Yesterday, it failed to close below the 50 simple moving average (SMA) – 4H as well, which was somewhat an encouraging sign. However, we cannot deny the fact that pair breached an important support trend line, which might continue to act as a resistance moving ahead. We need to see how long the pair can hold 50 SMA (4H). A break and close below the same might call for more downside towards the 61.8% fib retracement level, which is sitting just above the 100 SMA (4H). There is no doubt that there several key support areas on the way down for the pair which might protect losses in the pair moving ahead.

On the other hand, if the EURJPY pair bounces from the current levels, then the last swing high might come into play. A break above the same might take it towards 150.00.

German GDP

Later during the London session, the German Gross Domestic Product will be released by the Statistisches Bundesamt Deutschland. The forecast is slated for a 0.1% rise, compared with the last time decline of 0.1%. Any major miss might take the Euro lower moving ahead.