The Euro traded lower against the Japanese yen recently, but found support around an important area. The main reason for decline in the EURJPY pair was the economic release in Japan. Earlier during the Asian session, the Japanese Gross Domestic Product was released by the Cabinet Office. The outcome was not that good, as the GDP gained by 0.9% in the fourth quarter of 2014. There was a revision in the last reading as well from -0.5% to -0.6%. However, the Japanese industrial production registered a good increase, which ignited an upside reaction in the Japanese yen. Let us see how the EURJPY pair trades in the coming days.
There is a monster bullish trend line formed on the hourly chart of the EURJPY pair, which acted as a support for the pair recently. The most important point is that the pair is currently trading around the 100 hour MA, which might act as a catalyst in the near. Moreover, the 50% fib retracement level of the last leg from the 133.66 low to 136.67 high is also sitting around the same area. So, in short there is a major support area around the 135.20 level, which might act as a hurdle for the pair moving ahead. A break below the highlighted trend line might call for more loses in the pair towards the 200 hour MA.
On the upside, initial resistance is around the 135.60 level. A break above the same might take it towards the 135.80 level.
Overall, one might consider buying dips in the EURJPY pair as long as it is trading above the highlighted trend line.
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Posted By Simon Ji of IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com/
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