Can EUR/JPY Move Above 131.50 Resistance?16 May, 2018 by Aayush Jindal in Market Analysis
- The Euro found support near 129.20/30 and recovered higher against the Japanese Yen.
- There is a major bearish trend line in place with resistance near 131.30 on the 4-hour chart of EUR/JPY.
- The Euro Area Gross Domestic Product in Q1 2018 (Prelim) came in at 0.4%, similar to the forecast.
- Today, the Euro Zone CPI for April 2018 will be released, which is forecasted to rise 1.2% (YoY).
EURJPY Technical Analysis
The Euro declined heavily earlier during the start of May 2018 against the Japanese Yen. The EUR/JPY pair broke 132.00 and 130.00 support levels before finding buyers just above 129.20.
A low was formed at 129.23 before the pair started an upside correction. It moved higher and broke the 130.00 resistance, and even cleared the 23.6% Fib retracement level of the last decline from the 133.48 high to 129.23 low.
It gained bullish momentum above 131.00, but buyers faced a major hurdle just below 131.50. The 50% Fib retracement level of the last decline from the 133.48 high to 129.23 low acted as a resistance.
Moreover, there is a major bearish trend line in place with resistance near 131.30 on the 4-hour chart of EUR/JPY. Moreover, the 100 (red) and 200 (green) simple moving averages (4-hour) are near 131.50/60.
Therefore, a break above the 131.30-50 resistance won’t be easy. If buyers succeed, the pair may rise towards 132.00 and 133.00 in the near term. On the downside, supports are at 130.20 and 130.00.
Recently, the Euro Area Gross Domestic Product for Q1 2018 (Prelim) was released by the Eurostat. The market was looking for a growth rate of 0.4% compared with the previous quarter.
The actual result was similar, and the yearly change was also in line with the forecast of 2.5%. The report mentioned that:
Seasonally adjusted GDP rose by 0.4% in both the euro area (EA19) and the EU28 during the first quarter 2018, compared with the previous quarter. In the fourth quarter of 2017, GDP had grown by 0.7% in the euro area and by 0.6% in the EU28.
The overall result was neutral, and it did not help the EUR/JPY and EUR/USD pairs in the short term.
Economic Releases to Watch Today
- German Consumer Price Index for April 2018 (YoY) – Forecast +1.6%, versus +1.6% previous.
- German Consumer Price Index for April 2018 (MoM) – Forecast 0%, versus 0% previous.
- Euro Zone CPI for April 2018 (YoY) – Forecast +1.2%, versus +1.2% previous.
- Euro Zone CPI for April 2018 (MoM) – Forecast +0.3%, versus +1.0% previous.
- Euro Zone Core CPI for April 2018 (YoY) – Forecast +0.7%, versus +0.7% previous.
- US Housing Starts April 2018 (MoM) – Forecast 1.310M, versus 1.319M previous.
- US Building Permits April 2018 (MoM) – Forecast 1.350M, versus 1.354M previous.
- US Industrial Production April 2018 (MoM) – Forecast +0.6%, versus +0.5% previous.