- The Euro bulls are showing strength ahead of the German GDP data release.
- A recovery move above the 20-EMA indicates the short-term trend is bullish.
- The RSI (14) is still in the 40.00-60.00 range, showing the absence of a potential trigger.
The EUR/JPY pair sensed a significant buying interest after dropping to near the four-day low around 140.80 in the early Asian session. The cross has picked demand ahead of the release of the preliminary German Gross Domestic Product (GDP) (Q4) data, which will release on Monday. The economic data is seen at 0% lower than the prior figure of 0.4% on a quarterly basis.
This week, the event that will keep the asset volatile is the interest rate decision by the European Central Bank (ECB), which will release on Thursday. Considering Eurozone’s roaring inflation, European Central Bank (ECB) President Christine Lagarde will push the interest rates higher by 50 basis points (bps) to 2.50%.
EUR/JPY is displaying rangebound action broadly in a Descending Triangle chart pattern on an hourly scale. The downward-sloping trendline of the above-mentioned chart pattern is plotted from January 25 high at 142.29 while the horizontal support is placed from January 25 low around 140.76. On a broader basis, the south side trendline from January 11 high at 142.61 will act as a major barricade for the Euro bulls.
The recovery move from the horizontal support of the chart pattern has pushed the cross above the 20-period Exponential Moving Average (EMA) at 141.22, which indicates that the short-term trend is turning bullish.
While the Relative Strength Index (RSI) (14) is still oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.
For an upside move, the cross needs to surpass January 25 high at 142.29, which will drive the asset toward January 11 high at 142.61 followed by October 24 low at 143.72.
On the flip side, a break below January 25 low around 140.76 will be a breakdown of the chart pattern, which will drag the asset towards January 5 low at 140.14. A slippage below the same will expose the cross for more downside toward January 17 high at 139.62.
EUR/JPY hourly chart
-638106349764496458.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.