EUR/JPY: where next, because cross is still above six-month uptrend?

Ross J Burland FXStreet

Currently, EUR/JPY is trading at 132.56, up 0.19% on the day, having posted a daily high at 132.92 and low at 132.19.

EUR/USD: headed to 1.1780/20? - Scotiabank

EUR/JPY tailed off on Tuesday in the US session after a rally from 132.41 to the aforementioned highs while government bond markets remain under pressure in the aftermath of the weekend referendum in Catalonia. The European data, however, was an additional and more positive catalyst to the upside in the euro, adding to yesterday's PMI's. The PPI data were stronger than expected and the remaining services/composite PMI’s are scheduled for release over the next 24 hours.

In respect tot he Yen, the Japan election risk has started to recede with Tokyo's PoH Koike saying,"won't seek a seat," so unlikely to run. Elsewhere, the Tankan data at the start of the week was positive and remains a focus in the absence of anything else scheduled for release. Wall Street's performance will be key for the pair today, with bulls still in control, and that is starting to be weighing on the yen again after the fall at the open today.

USD/JPY drops below 113.00 despite record highs in Wall Street

A reminder: the ECB releases its latest minutes on Thursday!

EUR/JPY levels

EUR/JPY remains on the defensive very near term, it has sold off to and so far held over the six-month uptrend line at 131.99. "Provided that the uptrend contains the downside, the longer term up move will remain intact and we should see a re-challenge the 134.32 Fibo 61.8% of the move down from 2014," according to analysts at Commerzbank.

However, they also warned that the intraday Elliott wave counts are conflicting and caution is warranted. "Above 134.32/58 would target the 1979-2017 resistance line at 139.12. Where are we wrong near term? A move below the 55 day moving average is needed to alleviate upside pressure and retarget the 129.37 September low and the 127.57 August low." the analysts explained.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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