EURJPY – Euro Facing Uphill Task Vs Japanese Yen

Key Highlights

  • The Euro recently bounced from the 120.20 low against the US Dollar, but found resistance near 121.10-20.
  • There was a break above two bearish trend lines at 120.60 on the 4-hours chart of EURJPY.
  • Today in Australia, the Employment Change released by the Australian Bureau of Statistics for Jan 2017 came in at 13.5K, compared with the forecast of 10K.
  • The Unemployment Rate came in at 5.7% in Jan 2017, compared with the forecast of 5.8%.

EURJPY Technical Analysis

There was a recovery initiated in the Euro from the 119.32 low against the Japanese yen. The EURJPY pair moved above 120.00, but now faces a major hurdle near 121.20.

EURJPY Technical Analysis Euro Yen

The stated resistance area is a major confluence area. It acted as support on multiple occasions, and now acting as a resistance. It also represents the 61.8% Fib retracement level of the last decline from the 122.51 high to 119.32 low.

Moreover, the 100 simple moving average is also at 121.25. This means there is a clear hurdle around 121.20. A break above it might push the pair towards 121.75. On the other hand, a failure would call for a retest of 120.00.

Australia’s Employment Change

Today in Australia, there was a major release, as the Employment Change figure for Jan 2017 was published by the Australian Bureau of Statistics. The market was expecting the change in the number of employed people in Australia to be 10K in Jan 2017.

However, the result was better, as the change was 13.5K in Jan 2017. More importantly, the Unemployment Rate fell to 5.7% from 5.8%. The outcome helped the Aussie dollar and pushed the AUDUSD pair higher towards the 0.7740 level. More gains are likely towards 0.7780 in the near term.

US Building Permits

Today, the US will see the Building Permits release for Jan 2017 by the US Census Bureau, the Department of Commerce. The forecast is slated for 1.23M in Jan 2017, compared with the last 1.21M. It means an increase of around 0.2% is expected. Similarly, the US Housing Starts are expected to increase by roughly 0.1%.

The market sentiment at the moment favors the USD, and the results of these releases may impact it in the short term.

Aayush Jindal

Aayush is a Senior Forex/Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over seven years as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency and commodities markets.

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