EUR/JPY: Fails near 134, drops below 1h 50-SMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 7, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The EUR/JPY failed to resist strong barrier around 134 handle and witnessed a sharp 40-pips downward spike in last hours, before attempting a tepid-bounce from lows now.

    EUR/JPY drops below hourly 50-SMA at 133.56

    Currently, the EUR/JPY pair drops -0.28% to 133.52, keeping range near fresh session lows struck at 133.49 levels. The cross brought an end to its downside consolidation and dived in the red, shadowing the drop in the EUR/USD pair. The main currency pair plunged to 1.0810 as European equities rebounded from the ECB-induced sell-off seen on Friday.

    Moreover, mixed set of macro data releases from the Euro land also weighed on investors sentiment, thus, dragging the cross further into losses. Germany’s industrial output increased 0.2% in Oct, compared to a 1.1% drop in Sept. Sentix released the Eurozone Investor Confidence data for December, which dropped to 15.7, versus a 17.2 reading expected.

    While a stronger USD/JPY caps the downside in the EUR/JPY cross as BOJ’s officials’ comments continue to push the yen lower. In the day ahead, the EUR calendar holds nothing of great relevance now, focus shifts towards the US labour market conditions index further momentum.

    EUR/JPY Technical Levels

    To the upside, the next resistance lies at 134 (round number), above which it could extend gains to 134.31 (100-DMA). To the downside, the cross finds immediate support at 133.31 (5-DMA), below that 132.86 (50-DMA), could act as a major support.
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