EUR/JPY Dips on Mixed Data: Sell the Rally?

The EUR/JPY declined slightly after mixed PMI data. It hits an intraday low of 161.17 and is currently trading around 161.526. The intraday outlook is bearish as long as the resistance 163 holds.

Germany's April 2025 flash PMI figures indicate a mixed snapshot of the economy, with manufacturing recording minimal growth in output even as it remained in contraction, buoyed by rising export sales and frontloading, while the services sector dropped sharply into contraction, with the Composite PMI below 50, a signal of a broad-based decline in private sector business activity. The economists are predicting that the German government is going to downsize its economic forecasts, predicting stagnation in 2025 because of the weakness in the service sector and uncertainty in trade, even while the manufacturing sector is relatively stable despite global challenges.

Technical Analysis:

The EUR/JPY pair is trading below   34, below 55 EMA and above 200-4H EMA  on the 4- hour chart.

• Near-Term Resistance: Around 162.10  a breakout here could lead to targets at 162.70/163/163.30/164.20/165/166.65/167.
   
• Immediate Support: At 161 if breached, the pair could fall to 160.50/160/  159.25/158.85/158.25.
  
  Indicator Analysis 4-hour chart):
   
• CCI (50): Bearish
   
• Average Directional Movement Index: Neutral

Overall, the indicators suggest Mixed  trend

Trading Recommendation:

It is good to sell on rallies around 162 with stop loss at 163 for a TP of 160.