The EUR/JPY was one of the worst performers this week and lost more than 250 pips on board-based Yen buying. It hit a low of 158.23 and currently trading around 158.74. The bearish intraday outlook is maintained as long as the resistance at 160.35 holds.
Yen strength
The Japanese Yen (JPY) has strengthened today, reaching its highest value against the US Dollar (USD) in over a month, mainly due to strong inflation data from Tokyo. This has raised expectations for an interest rate hike by the Bank of Japan (BoJ) in December. Additionally, concerns over geopolitical issues and US trade policies are driving investors toward the safe-haven Yen. Meanwhile, the USD is weakening, trading near a two-week low, which has also helped the JPY gain value.
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 159.10– a breakout here could lead to targets at 159.70/160.35/161, 161.75, 162, 163, and 164.18.
Immediate Support: At 158.20 – if breached, the pair could fall to 157.05/155.51.
Indicator Analysis (4-hour chart):
- CCI (50): Bearish
- Average Directional Movement Index: Bearish
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.
