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Euro-Yen: Current 101.37 (Sunday, January 29, 2011).
EURJPY Trend: Upward correction during downtrend.
Euro-Yen (EURJPY) Outlook: Some more upward correction/sideways move before another fall.
Please refer daily currency charts and not short-term charts e.g. hourly Forex charts.
Euro-Yen (EURJPY) - Recent economic releases:
• EU: Consumer Confidence (Prelim): -20.6, less than the forecast of -20.0 but better than the previous -21.3.
• EU: German PMI (Manufacturing) -Prelim: 50.9, positive as compared to the forecast (49.2) as well as the previous release (48.4).
• EU: German PMI (Services) -prelim: 54.5, positive as compared to the forecast (52.6) as well as the previous release (52.4).
• EU: PMI (Manufacturing) -prelim: 48.7, positive as compared to the forecast (47.5) as well as the previous release (46.9).
• EU: PMI (Services) -prelim: 50.5, positive as compared to the forecast (49.1) as well as the previous release (48.8).
• EU: Industrial New Orders (YoY): -2.7%, same as the forecast but quite poor against the previous 1.5%. The month on month data (1.3%) was better than the forecast of -2.1% but again quite less than the previous 1.5%.
• EU: German IFO Expectations: 100.9, positive as compared to the forecasts (99.0) as well as the previous (98.6).
• EU: German IFO Business Climate: 108.3, positive as compared to the forecasts (107.8) as well as the previous (107.3).
• EU: German IFO- Current Assessment: 116.3, slightly negative as compared to the forecast (116.8) as well as the previous (116.7).
• EU: German Gfk Consumer Confidence Survey: 5.9, positive as compared to the forecasts (5.6) as well as the previous (5.7).
• Japan: Merchandise Trade Balance (Total): -205.1B Yen, though less than the forecast of -154.9B Yen but quite better than the previous JPY -684.7B.
• Japan: national CPI (YoY): -0.2%, same as the forecasts but much better than the previous -0.5%. Same with year on year National CPI ex Fresh Food which was same as the forecast (-0.1%) but better than the previous -0.2%.
• Japan: Retail Trade (YoY): 2.5%, positive as compared to the forecasts (2.3%) as well as the previous release (-2.2%).
• Japan: large Retailers' Sales: -0.4%, positive as compared to the forecast (-0.5%) as well as the previous (-2.5%).
EURJPY (Euro-Yen) - Technical Trend Analysis:
1) MACD:EURJPY daily MACD line remains over the signal line with a wide and convincing gap. 4-hourly MACD’s last crossover was going below the signal line sharply. It stays below it but the gap has narrowed down slightly.
2) ADX: EURJPY daily +DI line had crossed over -DI line sharply and the gap was widening. Recently the gap has narrowed down a bit. ADX, which was well above 25 (touching 47) to indicate the strength of the bearish trend, has moved down but is still over 30.
3) Ichimoku Cloud:Tenkan-Sen crossed over Kijun-sen to give a weak bullish signal (you may please check our Ichimoku cloud page under technical analysis). The upward move found the resistance exactly at the upper edge of the cloud and then support exactly at the Tenkan-Sen level. Weekly closing was within the cloud. Please check EURJPY daily Ichimoku Cloud.
Euro-Yen (EURJPY) - Forecast /Outlook:
Previous Outlook of EURJPY :
“A break of 100.33 should bring in some more upward correction towards the 55-day EMA resistance of 100.65 and if a firm break takes over 100.65/100.80 range then we would expect some more correction towards the next resistance zone of 102.00 to 102.50. This zone would represent the resistance of the upper edge of the daily Ichimoku cloud as well as resistance area during the end of December 2011. Not only this but 102.50 is also the Fibonacci 38.2% retracement of the downward move from October 30th, 2011 to January 16th, 2011.”
This Week:
Well, the Euro-Yen moved as we had mentioned during the last weekend and quoted above. The currency pair went up to 102.22 and found resistance exactly at the upper edge of the daily Ichimoku cloud. The downward move from this resistance found support exactly at the Tenkan-sen support level.
Well, for the next week we will first be watching for a break of either the above mentioned support or resistance i.e. resistance of 102.22/102.30 and support at 100.58/100.50.
On the upside even a break of the resistance of 102.22 should bring some stronger resistance near 102.52, which was the peak of the resistance zone during December 14th to December 27th, 2011. If EURJPY breaks over this resistance then we would expect further slow move towards the psychological resistance of 104.80/105.20.
On the downside, even a break below 100.58/100.50 should bring a support near the psychological level of 100.00 and below that we would expect support at the Kijun-sen level of daily Ichimoku cloud i.e. near 99.60/99.65. Any firm break below this will indicate that the recent correction is over and we can change our focus back towards a retest of 97.03. As we have been mentioning for past couple of weeks that below 97.00 the strong psychological support of 95.00 would start working and any subsequent downward move should be slow and with frequent supports near 96.60 and above 96.20 and 95.60. But in case the market sentiments do not have sudden change because of some major economic news from the Euro zone, subsequently we expect a move towards 94.10/94.05 (inverse 61.8% projection of the upward correction between October 3rd to 30th and also the psychological aspects of the price action).
Overall our near-term bearish outlook will only change to expect some convincing upward gains if EURJPY breaks over 102.20/102.50 range firmly. In that case also the 105.00 range is expected to bring a strong resistance.
Strategies for trading EURJPY (Euro-Yen):
As mentioned above, the outlook for EURJPY is bearish but possibilities of some more upward correction/consolidation cannot be ignored. We will be watching the resistance and support levels for EURJPY as mentioned above to take the positions on either side. Overall we expect a slower movement on either side unless and until some major economic development/news changes the sentiments in a big way.
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For short term Forex trades, please refer to daily technical analysis for Euro/Japanese Yen at EUR/JPY.
You may also share and check any real-time trading positions for Euro-Yen in forum and the current EURJPY market sentiments.
Euro/Yen Interest Rate Comparison
(For Carry Trades) |
1.00% |
0.10% |
0.90% |
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