SUMMARY: Sell Now
Moving Average: Sell
Technical Indicators: Sell
Fundamentals EUR/JPY: Neutral/Buy
EURJPY Live Chart
EURJPY Technical Review by IRONFOREX
EURJPY traded in a sideways range during the European morning Monday, staying within the 115.30 (R1) resistance zone and the 114.60 (S1) support barrier.
In my view, following the break above the 113.80 (S3) barrier, the short-term outlook has turned positive. As a result, I would expect a clear break above 115.30 (R1) and the downslope resistance line taken from the peak of 21st of July, to open the way for the next key resistance zone of 115.70 (R2).
Looking at our short-term oscillators though, a retreat could be on the cards before the next attempt to break the 115.30 (R1) line.
The RSI found resistance at its 70 line, while the MACD, although above both its zero and trigger lines, shows signs of topping.
As for the bigger picture, I see that the pair has been trading in a sideways range between the 112.50 key support zone and the resistance territory of 116.30 (R3) since early July.
As a result, although the pair may continue trading north for a while, from the lower bound to the upper one, I would consider the longer-term picture to be flat.
- Support: 114.60 (S1), 114.20 (S2), 113.80 (S3)
- Resistance: 115.30 (R1), 115.70 (R2), 116.30 (R3)
EURJPY Fundamental Review by IRONFOREX
Eurozone’s preliminary CPI accelerated in October, as the large drags from previous declines in energy prices factored out of the yearly CPI calculation.
The headline rate ticked up, while the core rate remained unchanged, both in line with their forecasts. Following Draghi’s comments at the latest meeting’s press conference that there are no signs of a convincing upward underlying trend in inflation, we continue to expect the Bank to extend the minimum duration of its QE program at the December meeting.
However, as things currently stand we consider it unlikely that the ECB will adopt any fresh easing measures, mainly due to the remarkable improvement in the bloc’s 5-year inflation expectations since early September.
This is an early indication that Eurozone’s inflationary pressures may have picked up, perhaps as a result of the Bank’s extremely accommodative policy stance.
Market reaction was relatively muted on these news as the data offered little to change investors’ expectations.
EURJPY Trading Recommendation
BoJ mission is to boost inflation and its currency, but right now is waiting in the sideline. The Euro should bounce but it can bring higher volatility. It is still a sell to neutral.
Factors Influencing the EURJPY
- Euro Zone Prices & Inflation.
- Euro Zone Confidence and Sentiment; ZEW survey.
- Euro Zone Monetary Policy Report “ECB Rate Announcement & Press Conference”
- Euro Zone GDP/Economic Growth.
- Euro Zone Balance of Payments.
- Japan’s Gross Domestic Product, GDP.
- Japan’s index of industrial production. Japan is an economy that depends on manufacturing.
- Japan’s Unemployment.
- Japan’s Trade Surplus. Japan’s strength is based on how well manufacturers perform.
- Japan’s Tankan Survey.
- Oil prices. Japan imports most of its oil needs. Higher oil prices are considered bad for the Japanese economy.