EUR/JPY – Euro Eyeing Upside Break Vs Japanese Yen?11 October, 2017 by Aayush Jindal in Market Analysis
- The Euro continues to trade above a major support area at 131.75 against the Japanese Yen.
- There are two important bearish trend lines forming with resistance at 132.60-80 on the 4-hours chart of EUR/JPY.
- Japan’s New Machinery Orders rose 3.4% in August 2017 (MoM), compared with the forecast +1.1%.
- Today in the US, the FOMC meeting minutes will be published, which might ignite swing moves in the short term.
EURJPY Technical Analysis
The Euro attempted a break below 131.75 against the Japanese Yen on a few occasions, but failed. The EUR/JPY pair is currently consolidating above 131.75 and preparing for the next move.
Looking at the 4-hours chart, there are two important bearish trend lines forming with resistance at 132.60-80. The trend line resistance is also near the 38.2% Fib retracement level of the last decline from the 134.40 high to 131.74 low.
Moreover, the 100 simple moving average (red) on the same chart is at 132.85 to prevent gains above 133.00. As long as the pair is below the 133.00 resistance and the 100 SMA, there are chances of a downside break.
On the downside, the 131.75 area is a crucial support since is coincides with the 200 simple moving average (green). A break and close below 131.75 would call for more losses in EUR/JPY towards the next support at 130.40.
On the flip side, a close above 132.85 and 133.00 could push the pair back in the bullish path for an extension towards the 134.20 level.
Japan’s New Machinery Orders
Today in Japan, the Machinery New orders figure for August 2017 was released by the Cabinet Office. The forecast was slated for a rise of 1.1% in orders compared with the previous month.
The actual result above the forecast as there was a rise of 3.4% in orders. In terms of the yearly change, there was a rise of 4.4%, which was a lot more compared with the forecast of +0.8% and the last -7.5%.
To sum up, the EUR/JPY pair is poised for the next move either above 132.70 or below 131.75. The chances of an upside break are high considering the recent price action and H4 RSI moving towards 60.