The Euro suffered a major setback against the US dollar this past week, but somehow managed to hold the ground against the Japanese yen. The main reason for this was the weakness of the Japanese yen across the board. The EURJPY pair is trading around an important level, which is likely to act as a pivot zone for the pair in the near term. The Euro zone consumer confidence will be released later today, which can cause moves in the pair. The market is not expecting a good reading this time around, and if that happens, then the Euro might come under pressure in the short term.
There is a monster trend line on the hourly chart of the EURJPY pair, which held the downside in the pair on many occasions. Currently, the pair is trading around the mentioned trend line, and what’s more important is that the pair is right around the 50% fib level of the last leg from the 138.46 low to 141.20. Moreover, the 100 hourly simple moving average is also sitting just below the highlighted trend line. In short, the 139.80-60 holds a lot of importance in the near term for the pair, and if the Euro sellers manage to break the mentioned support area, then a move towards the 200 hourly moving average is possible.
Alternatively, there is also a chance that the pair bounces from the current area. In that situation, the pair might head back towards the last high of 141.20. The hourly RSI needs to break the 50 level if the pair has to continue trading higher.
Overall, one might attempt a sell trade with a break below the trend line and support area.
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Posted By Simon Ji of IKOFX
