The Euro was seen trading lower against the Japanese yen Intraday. The EURJPY pair has breached an important bullish trend line on the hourly chart. The highlighted trend was coinciding with the 100 simple moving average (hourly) and 23.6% Fibonacci retracement level of the last up-move from the 137.70 low to 138.92 high. So, this break was critical, and has opened the doors for further downside acceleration. Currently, the pair is flirting with the 200 SMA (hourly) and struggling to break the same.
However, this does not deny the fact that the pair might now trade lower in the coming sessions possibly towards the 50% fib retracement level. If sellers gain control then the pair might even challenge the 61.8% fib, followed by the previous low of 137.70. If the pair bounces from the current levels, then the broken trend line might act as a resistance, followed by the 100 hourly SMA. A break and close above the 100 SMA could again establish the bullish trend in the pair, which might take it towards the last high at least.
The hourly RSI is below the 50 level, which can be considered as a negative sign in the short term. If the RSI breaks above the 50 level and settles above, then the chance of a run towards the 138.80 level would increase.
Japan’s CPI and Unemployment Data
Later during the next Asian session, the Tokyo’s and national Consumer price index data will be published by Statistics Bureau. If the outcome stays in line with the expectations or exceeds, then the EURJPY pair could continue trading lower. Moreover, the Japan’s unemployment rate will also be released, which is expected to come at 3.6%.
Posted By Simon Ji of IKOFX
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