Can EUR/JPY Recover Above 132.50?29 March, 2018 by Aayush Jindal in Market Analysis
- The Euro made a major top near the 137.50 level against the Japanese Yen.
- There was a break below an important bullish trend line with support at 134.20 on the daily chart of EUR/JPY.
- The German GfK Consumer Confidence for April 2018 posted a minor rise from 10.8 to 10.9.
- Today, the German CPI report for March 2018 (Prelim) will be released, which is forecasted to post a rise of 1.7% (YoY).
EUR/JPY Technical Analysis
There was a major downside move initiated in the Euro from the 137.50 high against the Japanese Yen. The EUR/JPY pair traded towards the 129.00 level where buyers protected further declines.
Looking at the daily chart of EUR/JPY, it seems like a good support is forming above the 129.00 level. The pair even moved above the 23.6% Fib retracement level of the last decline from the 137.50 high to 128.94 low.
However, there are many resistances on the upside near the 131.50, 132.00 and 132.50 levels. A proper close above the 132.00 level and the 200 simple moving average (green, 4-hour) is needed for further gains in the near term.
On the downside, the 129.00 support holds the key. If the pair fails to stay above 129.00, the last downtrend may resume.
Recently, the German GfK Consumer Confidence for April 2018 was released. The market was looking for a minor decline from the last reading of 10.8 to 10.7.
However, the actual result was better since there was a rise from 10.8 to 10.9. The report added that:
The consumer mood in Germany has stabilized in March after the previous month’s minor setback. Both economic and income expectations, as well as propensity to buy, are on the increase again. GfK forecasts an increase in consumer climate for April of 0.1 points in comparison to the previous month to 10.9 points.
Overall, downsides could be limited in EUR/JPY, but it must gain momentum above 132.00 and 132.50 to continue moving higher.
Economic Releases to Watch Today
- UK GDP for Q4 2017 (YoY) – Forecast +1.4% versus +1.4% previous.
- German Consumer Price Index for March 2018 (Prelim) (YoY) – Forecast +1.7%, versus +1.4% previous.
- German Consumer Price Index for March 2018 (Prelim) (MoM) – Forecast +0.5%, versus +0.5% previous.
- US Initial Jobless Claims – Forecast 230K, versus 229K previous.
- US Personal Income for Feb 2018 (MoM) – Forecast +0.4%, versus +0.4% previous.