EUR/JPY analysis: Modest recovery not enough to confirm further gains
EUR/JPY Current price: 118.50
The EUR/JPY pair recovered some additional ground this Wednesday, peaking at 118.78 after reaching a fresh 2017 low of 117.42 earlier in the week. The Nikkei Japan Services PMI surged to a fresh 19-month high of 52.9 in March from February's 51.3, indicating an upturn in demand. Japanese data tend to have a contrarian effect on the data, as better-than-expected numbers rather support an advance in local shares that in the yen, while improved mood tends to dent demand for the safe-haven currency. The pair gained measly 20 pips daily basis, as both currencies moved in tandem against the greenback, although the common currency's decline was for the most shallow. The pair is barely above 118.40, the 50% retracement of the late 2016 monthly run, while intraday technical readings fail to provide bullish signs, although the bearish potential has somehow diminished. In the 4 hours chart, the 100 SMA has accelerated its decline below the 200 SMA, both well above the current level, whilst the RSI indicator has lost upward strength and turned flat around 48, whilst the Momentum indicator aims higher, but right below the 100 level. If the pair holds above the mentioned 118.40 level, it could recover further, although only above 119.65 the recovery will become more sustainable.
Support levels: 118.40 118.00 117.65
Resistance levels: 118.80 119.20 119.65
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
