- The Euro managed to recover against the Japanese yen recently, but remain below a major resistance of 114.00.
- There is a monster bearish trend line formed on the 4-hours chart of EUR/JPY, which may stop the upside move.
- The German consumer price index released by the Statistiches Bundesamt Deutschland posted a rise of 0.3% in July 2016, just as the market expected.
Earlier during the London session, the Germany consumer price index figure was reported by the Statistiches Bundesamt Deutschland. The market was expecting the average price change for all goods and services purchased by households for consumption purposes to increase by 0.3% in July 2016, compared with the previous month.
The actual was as expected, as there was a rise of 0.3% in the CPI. In terms of the yearly change, the Germany consumer price index rose 0.4%, which was again in line with the market forecast.
There were a few other releases as well in the Euro Zone, including German GDP and France Nonfarm Payrolls. All reports were positive, and helped the Euro to gain traction.
The Euro is currently trading with a positive bias vs yen, but we need to keep a close watch as there are a couple of important resistance levels aligned on the upside.
EUR/JPY Pair Analysis
The EUR/JPY pair recently traded as low as 112.33 versus the Japanese yen where the Euro bulls appeared and defended the downside. The pair started recovering and traded above the 23.6% Fib retracement level of the last drop from the 116.91 high to 112.33 low.
No doubt, there are positive signs for the Euro at the moment. However, when I look at the 4-hours chart of the EUR/JPY pair, there is a monster bearish trend line. It can be seen as a resistance and act as a hurdle for more gains in EUR/JPY.
As long as the pair is below the trend line, it may start a reversal. On the other hand, if the Euro bulls succeed in breaking it, then a move towards the 114.60 level is possible.
Tags: EUR/JPY, EUR/JPY Pair Analysis, Euro, Euro Zone, German CPI, Japanese Yen