EUR/JPY Forecast – Euro Facing Crucial Resistance Vs Japanese Yen

EUR/JPY Forecast – Euro Facing Crucial Resistance Vs Japanese Yen

  • – The Euro declined recently and broke the 130.60 support area against the Japanese Yen.
  • – There is a crucial bearish trend line in place with resistance at 130.55 on the hourly chart of EUR/JPY.
  • – Today in Japan, the Nikkei Manufacturing PMI for July 2018 (Prelim) was released.
  • – The outcome was below the market forecast of 53.2 as there was a decline in the PMI to 51.6 from 53.0.

 

Japan’s Nikkei Manufacturing PMI

Today in Japan, the Nikkei Manufacturing PMI for July 2018 (Prelim) was released. The market was looking for a rise in the PMI from the last reading of 53.0 to 53.2.

 

However, the actual result was below the market forecast of 53.2 as there was a decline in the PMI to 51.6 from 53.0. There was a notable decline in the Business confidence. The report added that:

 

Japan Flash Manufacturing PMI falls to 20-month low of 51.6 in July, from 53.0 in June. Input and output price inflation both accelerate to multi-year highs.

 

The EUR/JPY pair is currently consolidating near the 130.00 level and upsides remain capped by the 130.50 and 130.60 resistance levels.

 

EUR/JPY Technical Analysis

The Euro faced a strong resistance near the 131.90 level against the Japanese Yen. The EUR/JPY pair started a downside move, broke the 131.00 and 130.60 support levels, and settled below the 100 hourly simple moving average.

 

EUR/JPY Technical Analysis Euro Japanese Yen

 

The pair even broke the 130.00 handle and traded as low as 129.82. Later, the pair corrected higher and tested the 50% Fib retracement level of the last decline from the 131.04 high to 129.82 low. However, the recovery was capped and the pair dipped back towards 130.00.

 

On the upside, there is a crucial bearish trend line in place with resistance at 130.55 on the hourly chart of EUR/JPY. The same trend line is near the 61.8% Fib retracement level of the last decline from the 131.04 high to 129.82 low.

 

Therefore, if the pair corrects higher, it is likely to find sellers near the 130.55 and 130.60 levels. On the downside, a break below 130.00 and 129.85 could push the pair further lower towards the 129.50 and 129.20 support levels.


Also published on Medium.

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