EUR/JPY Forecast – Euro At Risk of More Declines Vs Japanese Yen

EUR/JPY Forecast – Euro At Risk of More Declines Vs Japanese Yen

  • – The Euro declined recently and broke the 129.40 support area against the Japanese Yen.
  • – There is a major bearish trend line formed with resistance at 129.00 on the hourly chart of EUR/JPY.
  • – Today in Japan, the Monetary Base report for August 2018 was released by the Bank of Japan.
  • – The outcome was above the market forecast of 6.3% as there was a rise in the Monetary Base by 6.9% (YoY).

 

Japan’s Monetary Base

Today in Japan, the Monetary Base report for August 2018 was released by the Bank of Japan. The market was looking for a rise in the Monetary Base by around 6.3% in August 2018 compared with the same month a year ago.

 

However, the actual result was above the market forecast of 6.3% as there was a rise in the Monetary Base by 6.9%. However, August’s reading was below the last increase of 7%.

 

The EUR/JPY pair recently found support near the 128.50 level and it is currently correcting higher towards the 129.00 resistance.

 

EUR/JPY Technical Analysis

The Euro topped below the 131.00 level recently against the Japanese Yen. The EUR/JPY pair traded as high as 130.86 and later started a downside move. The pair declined, broke the 129.80 and 129.40 support levels, and finally settled below the 100 hourly simple moving average.

 

EUR/JPY Technical Analysis Euro Japanese Yen

 

The pair even broke the 128.80 support area and traded as low as 128.55. Later, the pair corrected higher and tested the 23.6% Fib retracement level of the last drop from the 130.86 high to 128.55 low. However, buyers struggled to clear the 129.00 resistance zone.

 

More importantly, there is a major bearish trend line formed with resistance at 129.00 on the hourly chart of EUR/JPY. A break above the trend line resistance could open the doors for a larger correction towards the 129.80 resistance and the 50% Fib retracement level of the last drop from the 130.86 high to 128.55 low.

 

On the other hand, if the pair fails to move above the 129.00 resistance, it could resume its decline. A break below the recent low of 128.55 may perhaps push the pair towards the 128.00 handle.


Also published on Medium.

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