FxWirePro: EUR/JPY Daily Outlook

Chart - Courtesy Trading View 

Spot Analysis:

EUR/JPY was trading 0.23% higher on the day at 0.8619 at around 10:10 GMT.

Previous Week's High/ Low: 0.8675/ 0.8547

Previous Session's High/ Low: 0.8634/ 0.8566

Fundamental Overview:

Data released by the Federal Statistics Office showed that German Factory Orders rose 0.8% in October against -0.2% estimated and compared to -4.0% fall in the previous month.

On an annualized basis, Germany’s Industrial Orders arrived at -3.2% in the reported month vs. -7.5% expected and -10.8% previous.

Upbeat German Factory Orders data in October suggested that the manufacturing sector activity is staging a modest recovery.

On the other side, markets await the release of Japan's Gross Domestic Product (GDP) data on Friday. 

On an annualized basis, Japan’s GDP is expected to contract by 1.1% against 1.2% prior contraction. On a quarterly basis, data is expected to contract by 0.3%, similar to the prior print. 

A contraction in Japan’s GDP may compel the Bank of Japan to extend policy easing to support the economy.

Earlier in the day, BOJ’s Kuroda mentioned that Japan has not achieved stable 2% inflation accompanied by wage rises.

Technical Analysis:

- EUR/JPY has retraced brief dip below 110-EMA

- Price action has edged above 200H MA and 5-DMA 

- Stochs and RSI have turned bullish from near oversold levels

- GMMA indicator shows bullish shift on the intraday charts

Major Support and Resistance Levels:

Support - 142.97 (5-DMA), Resistance - 144.08 (21-EMA)

Summary: EUR/JPY pivotal at 21-EMA resistance, decisive break above will fuel further gains.