EUR/JPY: Riding the Euro Wave, Targets 164.20

The EUR/JPY gained sharply on a strong Euro. It hit an intraday high of 162.69 and is currently trading around 162.39. The intraday outlook is bullish as long as the support 161.50 (200- 15 min EMA) holds.

In reply to the temporary halt by the U.S. government of a scheduled 20% tariff on European products in favor of a flat 10% tariff for three months (not including current tariffs on steel, aluminum, and automobiles), the EU has agreed to suspend its retaliatory tariffs against American products for 90 days to enable negotiations. The EU hopes to utilize this time to negotiate a full trade agreement, possibly with zero tariffs on manufactured goods, while planning internally to assist industries hit by tariffs and ensure equitable competition in the single market, as fears grow that rising tariffs could severely damage the EU economy and even lead to a recession.

Technical Analysis:

The EUR/JPY pair is trading above 34, below 55 EMA, and 200-4H EMA in the 15 min chart.

• Near-Term Resistance: Around 163 a breakout here could lead to targets at 164.20/165/166.65/167.
   
• Immediate Support: At 161.70 if breached, the pair could fall to 161/160.50/160/  159.25/158.85/158.25.
  
  Indicator Analysis 15 min chart):
• CCI (50): Bullish
   
• Average Directional Movement Index: Bullish

Overall, the indicators suggest bullish trend

Trading Recommendation:

It is good to buy on dips around 162.58-60 with stop loss at 161.50 for a TP of 164.20.