The EUR/JPY jumped more than 200 pips after hitting a multi-week low of 160.87. It hit a high of 162.82 and is currently trading around 162.815. The bullish intraday outlook is maintained as long as the support 1of 61.80 holds.
The euro fell significantly against the US dollar last week, hitting its lowest level in over two years. This decline is mainly due to the European Central Bank's plan to cut interest rates sooner than the US Federal Reserve, widening the gap between US and Eurozone rates. Economic troubles in the Eurozone, including political instability and weak data, further weakened the euro. Optimism about President Trump's policies has, besides, built up the dollar, making the euro drop by nearly 3% in a short time. Overall, the decline of the euro is in alignment with several factors including different monetary policies, economic concerns, and a strong dollar.
Technical Analysis:
The EUR/JPY pair is trading above the 55 EMA and 200-4H EMA and below 34 EMA as well as the 200 EMA in the 4-hour chart.
- Near-Term Resistance: Around 163– a breakout here could lead to targets at 163.55/163.85/164.70.
- Immediate Support: At 161.80 – if breached, the pair could fall to 161.37/159.80/159/158.60/158.
Indicator Analysis (4-hour chart): - CCI (50): Bearish
- Average Directional Movement Index: Neutral
Overall, the indicators suggest a mixed trend.
Trading Recommendation:
It is good to buy on dips around 162.50, with a stop loss at 161.80 for a TP of 165.
