EUR/JPY showed a minor pullback as the Euro recovers. It hit a low of 160.57 yesterday and is now trading around 161.45. The intraday outlook is bearish as long as the resistance 163 holds.
Recent economic data from Europe shows a mixed picture as the region deals with inflation and energy supply issues. The Euro Area's inflation rate held steady at 2%, but consumer confidence declined slightly, indicating caution among consumers. Wage growth increased to 5.42%, putting pressure on labor costs, while industrial production dropped by 2%. Despite these challenges, Europe recorded a larger trade surplus, and the economy is expected to gain momentum in 2025 with ongoing recovery efforts.
Technical Analysis
The pair is currently below the 34- and 55 EMA, as well as the 365 Hull moving average on the 4-hour chart.
Near-Term Resistance: Around 161.75. A breakout here could lead to targets of 162/163/164.18.
Immediate Support: At 160.50. If this level is breached, the pair could drop to 160/ 159, or 158.10.
Indicator Analysis (4-hour chart)
- CCI (50): Bearish
- Average Directional Movement Index: Bearish
Overall, indicators suggest a bearish trend.
Trading Recommendation
Consider selling on rallies around 161.48-50, with a stop loss at 162, aiming for take profit levels at 158.15.
