The EUR/JPY showed a minor pulback due to profit booking. It hits a low of 156.38 and currently trading around 157.79. The bearish intraday outlook is maintained as long as the resistance at 160.35 holds.
Euro Weakness
Euro lost its shine amid France's political crisis. It is facing a serious political crisis with Prime Minister Michel Barnier's minority government at risk of collapsing due to a no-confidence vote.
His proposed €60 billion budget to reduce the deficit is encountering strong opposition from both right and left-wing parties. To bypass this, Barnier used a controversial method to pass a social security budget, prompting more opposition challenges. The political turmoil has raised concerns about France's financial stability, affecting its bond yields and raising questions about future governance.
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 158.10– a breakout here could lead to targets at 158.80/159.10/159.70/160.35/161, 161.75, 162, 163, and 164.18.
Immediate Support: At 156.90 – if breached, the pair could fall to 156.40/155.51.
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 158, with a stop loss at 159.10, targeting to take profit levels at 155.
