The EUR/JPY dropped and touched fresh new lows today, even if the Nikkei stock index has increased further. The Yen increase also versus the Cable today, not only against the Euro. The JP225 has resumed the upside movement, has managed to reach the 21350 level and maintains a bullish perspective on the daily chart.
The Nikkei has increased sharply in the last weeks and seems poised to hit fresh new highs in the upcoming period, only a minor drop will force the Yen to accelerate the appreciation versus its rivals. The USD/JPY decreased in the last hours as the Nikkie stock index has slipped lower and erased some of the morning gains.
The Yen increased even if the Japanese Revised Industrial Production increased only by 2.0%, less versus the 2.1% estimate and versus the 2.1% growth in the former reading period. On the other hand, the Euro-zone Trade Balance and the German WPI have come in better than expected, but the Euro wasn’t impressed.
The EUR/JPY opened with a gap down today, signaling that the bears are very strong on the short term. Price has come back to close the morning gap, but failed to stay above the 132.13 Friday’s high. The next downside target will be at the upper median line (UML) of the major ascending pitchfork. Remains to see if we’ll have a retest of the broken chart pattern, or will continue to drop. I’ve said in the previous weeks that only a valid breakdown below the UML will confirm a larger drop.
