The EUR/JPY pair declined by over 150 pips yesterday, hitting a low of 159.09 and currently trading around 160. The bearish intraday outlook is maintained as long as the resistance at 162 holds. Markets are closely watching the release of German CPI data for potential direction.
Current Economic Context:
Today, Germany will publish preliminary Consumer Price Index (CPI) data, which will shed light on inflation trends. In October, the CPI increased by 0.4% month-over-month, with the annual inflation rate recorded at 2.0%. This rise was primarily driven by higher prices in services and food, while energy costs decreased at a slower pace. Analysts anticipate the November CPI to reflect a monthly increase of 0.3% to 0.4%, keeping the year-over-year inflation stable at around 2.0%.
Technical Analysis:
The EUR/JPY pair is trading below the 34 and 55 EMA, as well as the 365 Hull moving average on the 4-hour chart.
- Near-Term Resistance: Around 160.35 – a breakout here could lead to targets at 161, 161.75, 162, 163, and 164.18.
- Immediate Support: At 159 – if breached, the pair could fall to 158.46, 158.10, or 157.05.
Indicator Analysis (4-hour chart):
- CCI (50): Bearish
- Average Directional Movement Index: Neutral
Overall, the indicators suggest a continuation of the bearish trend.
Trading Recommendation:
Consider selling on rallies around 160.48–50, with a stop loss at 161.35, targeting take profit levels at 158.15.
