EURJPY – Euro Trend Overwhelmingly Negative Vs Yen; Fed Next21 September, 2016 by Aayush Jindal in EURJPY, Market Analysis, Technical Analysis
EURJPY – Euro Trend Overwhelmingly Negative Vs Yen; Fed Next
- The Euro nosedived against the Japanese yen recently and formed a bearish trend.
- The EURJPY pair during the downside cleared a major bullish trend line on the 4-hours chart.
- Today, the Japanese Merchandise Trade Balance Total released by the Ministry of Finance posted a trade deficit of ¥-18.7B in August 2016.
- The Adjusted Merchandise Trade Balance came in at ¥340.0B in August 2016.
EURJPY Technical Analysis
The Euro faced a lot of selling pressure lately and traded down towards 113.50 versus the Japanese yen. The EURJPY broke several important supports to establish a downtrend in the short term.
The EURJPY pair also settled below the 100 simple moving average on the 4-hours chart, which is a signal of things to follow. There was also a break below a major bullish trend line on the 4-hours chart.
So, if the EURJPY pair corrects higher from the current levels, then the same broken trend line might provide offers. Moreover, the 38.2% Fib retracement level of the last drop from the 116.08 high to 113.45 low may also act as a resistance.
Japanese Merchandise Trade Balance
Today in Japan, the Merchandise Trade Balance Total, which is a measure of balance amount between import and export was released by the Ministry of Finance. The forecast was lined up for a trade surplus of ¥202.3B in August 2016, compared with the last surplus of ¥513.5B.
However, the outcome was negative, as there was a trade deficit of ¥-18.7B. Moreover, when we look at the Adjusted Merchandise Trade Balance, then it posted a trade surplus of ¥340.0B. The Japanese yen was not impacted much after the release, as it continued to gain pace versus the Euro.
Fed Rate Decision
Today, the US will witness a monster release, as the Fed will announce interest rates. A lot is speculated about the upcoming event, and it looks like the market is prepared for the release. The forecast is lined up for no change in rates from 0.5%. However, there is a section of investors and traders who believe there is a chance of a rate hike.
So, we may see a lot of action during the next 24-48 hours in the US Dollar. Traders must trade with caution approaching this crucial event.