The EUR/JPY pared some of its gains on the weak Euro. It hit a high of 164.54 yesterday and is currently trading around 163.38. The bullish intraday outlook is maintained as long as the support of 161.80 holds.
Eurozone Inflation Update
The Eurozone's Core Consumer Price Index increased by 2.7% in December 2024 compared to the same month last year, in line with the previous month's rate and expectation. The overall inflation was above 2.2% at 2.4%, pulled up by energy. Among individual core inflation, there are the services, which gained 4.0%, while food, alcohol, and tobacco saw little change in its component at 2.7%. Non-energy industrial goods dropped to 0.5%. The European Central Bank is still facing a high rate of inflation, which shall be the determinant in the future interest rates.
German Retail Sales Report
In November 2024, German retail sales decreased by 0.6% from the previous month, contrary to forecasts made by analysts that there was a small rise of 0.5% expected. The previous months, since October, had shown a decrease of 1.5%. Retail sales, however, were still up 1% compared to November last year. The decline occurred despite expectations of higher sales due to holiday promotions such as Black Friday and Cyber Monday. This trend suggests there are economic factors and changes in the trend of consumer expenditure influencing the German retail sector.
Technical Analysis:
The EUR/JPY pair is trading above the 55 EMA and 200-4H EMA and below 34 EMA as well as the 200 EMA in the 4-hour chart.
- Near-Term Resistance: Around 165 a breakout here could lead to targets at 166.65/167
- Immediate Support: At 163 – if breached, the pair could fall to 162.80/162.45/161.75/160.80/160.
Indicator Analysis (4-hour chart):
- CCI (50): Bearish
- Average Directional Movement Index: Neutral
Overall, the indicators suggest a mixed trend.
Trading Recommendation:
It is good to buy on dips around 163 with a stop loss at 162 for a TP of 166.65.
