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The Euro was seen trading higher against the Japanese yen recently. The latter one was weakened across the board during the Asian session. However, it looks like the EURJPY pair might correct lower in the short term. The German Producer price index data was released during the London session today. The outcome was a touch disappointing, as the German PPI was expected register an increase of 0.1%. However, it remained flat in September 2014, compared to the last month. There was no impact on the Euro, but there are chances that it might move lower in the coming sessions.
There is a critical ascending channel formed on the hourly chart, which is acting as a support as of writing. The pair recently climbed higher towards the 137.00 level, but failed to gather momentum. The pair is now down, and trading around the channel support area. There is a possibility that it might break the same and move towards the 200 hourly moving average, which is also sitting around the 23.6% fib retracement level of the last leg from the 134.12 low to 137.02 high. The mentioned fib confluence area is a major support, and any break lower could spark a rally towards the 100 hourly moving average. The only bullish sign as of now is that the RSI is above the 50 level.
On the other hand, if the EURJPY pair bounces from the current levels, then a run towards the last high of 137.00 is possible in the short term.
Overall, one might consider selling with a break below the highlighted channel support area.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
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