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The Euro was seen consolidating in a range against the Japanese yen, but mostly struggled to break higher. There is a critical resistance around the 133.30-40 level, which is acting as a barrier for the Euro buyers. There are several important releases lined up today during the London session. The most important one is the Euro zone Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics. The market is expecting a minor rise from the last reading of 50.6 to 51.0. Let us see how the Euro reacts after the data release. If the outcome exceeds the expectation, then there is a possibility of a break higher in EURJPY.
There is a major bullish trend line formed on the hourly chart of the EURJPY pair, which acted as a support for many times. However, the most important point is that the 100 hour moving average is acting as a resistance for the pair. There is a chance of a retest of the highlighted trend line on the hourly chart where buyers might appear again. There is a negative sign to note as well because the hourly RSI has slowly moved below the 50 level. Let us see whether the Euro sellers can gain control or not. A break below the stated trend line might push the pair towards the 131.20 support area in the near term.
On the upside, a break above the 100 MA might call for more gains in the near term. The next area of interest would be around the 200 hour MA.
Overall, one might consider buying dips in the EURJPY pair as long as it is trading above the highlighted trend line.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com
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