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EUR/JPY firmer, aiming for 1h 200-SMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 28, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The cross in the EUR/JPY remains strongly bid in the mid-Asian trades, and continues to benefit from illiquid markets, with the euro extending last week’s gains versus the greenback.

    EUR/JPY tested Christmas highs

    Currently, the EUR/JPY pair trades 0.22% higher at 132.17, hovering close to session highs printed at 132.23 in early Asia. The EUR/JPY cross is seen gathering pace for a decisive break above 132.20-25 resistance zone and aims to reach hourly 200-SMA placed at 132.47.

    The cross receives double booster shot from a firmer EUR/USD and the renewed weakness seen in the yen versus the US dollar in the lead up to the New Year. The yen came under fresh selling pressure after dismal Japanese retail sales and industrial production data reinforced additional BOJ QQE expectations as early as next month.

    Industrial production in Japan was down a seasonally adjusted 1.0% m/m in November, missing forecasts for a decline of 0.5% following the 1.4% gain in October. While the total value of retail sales in Japan was down 1.0% on year in November.

    EUR/JPY Technical Levels

    To the upside, the next resistance lies at 132.47 (1h 200-SMA), above which it could extend gains to 133.50 (100-DMA). To the downside, the cross finds immediate support at 131.83 (daily pivot), below that 131.65/57 (daily low/ Oct 29 Low), could act as a major support.
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