The Euro traded lower against the US dollar and the British pound today, but it somehow managed to retain ground against the Japanese yen. However, it was less to do with the Euro strength and more to do with the yen’s weakness across the board. The EURJPY pair broke an important resistance area, which has increased the probability of more upside in the short term. The German CPI data was also published earlier during the London session, which came in line with the expectation. This could possibly support the Euro in the short term.

There was an important bearish trend line formed on the hourly chart for the EURJPY pair, which acted as a resistance several times. The pair recently broke the mentioned trend line, but found sellers around the 50% fib retracement level of the last drop from the 138 high to 135.72 low. So, it is likely that the pair might correct a bit lower from the current levels, but it could find the broken trend line on the downside, which might act as a support for the pair. Moreover, the pair is trading above the 100 hourly moving average, which is also a positive sign.

So, if the pair bounces from the current or a bit lower levels, then initial resistance can be seen around the 200 hourly moving average, which is just below the 61.8% fib level. A break and close above the 61.8% fib level might call for a move back towards the last high of 138.00.

Overall, buying dips remain a good option in the short term unless the pair breaks below the 100 hourly moving average.

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Posted By IKOFX Technical Team: Online Forex Broker

Website: http://ikofx.com