FxWirePro- EURJPY Trade Idea

The EUR/JPY breaks significant trendline support at 162.50 after a long consolidation on the strong yen. It hit a low of 162.20  and is currently trading around 162.24. The bearish intraday outlook is maintained as long as the resistance support 163.50 holds.

In December 2024, the European Manufacturing PMI remained at 45.2, showing no change from November and falling short of expectations. This signals an ongoing contraction in the Eurozone's manufacturing sector for two years, reflecting a worsening economy. New orders continue to decline, leading to significant cuts in factory output and job losses, especially in Germany and France. Although input costs have decreased, this reduction is slowing, pointing to ongoing inflation pressures. Overall, manufacturers are worried about future activity, with low confidence and expectations of more contraction ahead.

Technical Analysis:
The EUR/JPY pair is trading below the 55 EMA and 34 EMA as well as the 200 EMA in the hourly chart.

• Near-Term Resistance: Around 162– a breakout here could lead to targets at 162.80/163.20/163.55/163.85/164.70.
   
• Immediate Support: At 160.80 – if breached, the pair could fall to 159.80/159/158.60/158.
  
  Indicator Analysis (4-hour chart):

1. CCI (50): Bearish
2. Average Directional Movement Index: Bearish

Overall, the indicators suggest a bearish trend.

Trading Recommendation:
Consider selling on rallies 162, with a stop loss at 162.80 for a TP of  160.