EUR/JPY two-day slide from Friday continued today in the Asian/Pacific sessions  into the Euro today. The recent uptrend we predicted a few weeks back in June finally came to a halt after making an all-time high of 169.68 on Thursday last week.
See EUR/JPY chart above, (daily-chart shown – click to enlarge) . The last three trading sessions has seen the EUR/JPY cross downward pull-back into the trend channel. The current global economic situation and the German ZEW report this morning has not helped in this regard. After a relatively mild downward drips from Friday, Tuesday morning saw significant price movement south from the Asian trading session.
The Euro-session began with a 168.79 resistance. After a few hours of trading the market soon retreated to 166.39 support level. This downward sentiments was further buoyed by the weak German ZEW report that came in short of expectation. That presented further amunition for sell-offs.
However, we do anticipate correction around the 50-day moving average which lies on the 166.00/10 support. If this is violated we will be expecting a breach on the channel trendline leading to the 160.00 again. Above all there are also technical signs showing that the EUR has hit a possible momentum barrier at least for the time being. The “No Buyers..” comment from ECB chief last week and reports coming out of the euro-zone supports this. For now let’s wait and see as they unfold in the near few weeks.
Have a great day.
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