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Euro To Japanese Yen’s Long Term View

Key Highlights

  • The Euro is in a solid uptrend from the 115.00 swing low against the Japanese Yen, but facing hurdles near 134.50.
  • There was a break above a monster bearish trend line at 120.00 on the weekly chart of EUR/JPY.
  • Recently, the Germany’s consumer price index preliminary reading for Oct 2017 came in at 1.6% (YoY), less than the forecast of +1.7%.
  • Today, the Euro Zone’s Gross Domestic Product for Q3 2017 (Prelim) will be released, which is forecasted to increase 0.5% (QoQ).

EURJPY Technical Analysis

The Euro started a solid uptrend from the 115.00 swing low against the Japanese Yen. The EUR/JPY pair traded as high as 134.44 where it is faced a monster resistance.

Looking at the weekly chart, there was a break above a monster bearish trend line at 120.00. The pair followed a crucial bullish path and settled above the 130.00 handle, the 100-week simple moving average (red) and the 200-week simple moving average (green).

However, the pair seems to be struggling near 134.50. The last weekly candle is a bearish candle, overlapping the last bullish candle. This is a strong bearish signal and suggesting a short-term top.

On the downside, an initial support is near 130.00 and the 23.6% Fib retracement level of the last wave from the 114.85 low to 134.44 high. The mentioned 130.00 support is important since it is near the 200-week SMA.

A weekly below 130.00 would ignite a larger correction towards 123.00, the 100-week SMA and the 50% Fib retracement level of the last wave from the 114.85 low to 134.44 high. On the upside, a break of the 134.50 level is required to negate the current bearish sentiment.

Germany’s Consumer Price Index

Recently in the Euro Zone, the Germany consumer price index for Oct 2017 (Prelim) was released by the Statistisches Bundesamt Deutschland. The forecast was slated for a rise of 0.1% in Oct 2017 compared with the previous month.

The actual result was lower than the forecast, as there was no change in the CPI in Oct 2017. Looking at the yearly change, there was an increase of 1.6%, which was less than the forecast of +1.7% and also less than the last +1.8%.

The report added that:

In October 2017, the harmonised index of consumer prices for Germany, which is calculated for European purposes, is expected to increase by 1.5% year on year. Compared with September 2017, it is expected to be down by 0.1%.

The Euro pairs came under pressure after the release, and the EUR/JPY pair traded towards 131.50.

Economic Releases to Watch Today

Euro Zone CPI for Oct 2017 (Prelim) (YoY) – Forecast +1.4%, versus +1.5% previous.

Euro Zone Core CPI for Oct 2017 (Prelim) (YoY) – Forecast +1.2%, versus +1.3% previous.

Euro Zone Gross Domestic Product Q3 2017 (Prelim) (QoQ) – Forecast 0.5%, versus 0.6% previous.

Euro Zone Gross Domestic Product Q3 2017 (Prelim) (YoY) – Forecast 2.4%, versus 2.3% previous.

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