Key Points
- Euro spiked higher against the Japanese yen recently, and may be setting up for more gains in the near term.
- There is a contracting triangle pattern formed on the hourly chart of the EURJPY pair, which is on a verge of a break.
- Euro Area Industrial Production released by the Eurostat posted a rise of 0.2% in March 2016, less than the forecast of 1.1%.
- In terms of the monthly change, there was a decline of 0.8% in the Euro Area Industrial Production.
Technical Analysis
The Euro traded higher vs the Japanese yen recently and settled above the 100 and 50 hourly simple moving average. As this analysis is written, the EURJPY pair is attempting to break a contracting triangle pattern formed on the hourly chart.
If the Euro bulls succeed in breaking the triangle resistance area, then a move towards the 1.618 extension of the last drop from the 124.44 high to 123.60 low is possible.
On the downside, the 50 hourly simple moving average may continue to act as a support area.
Euro Area Industrial Production
Earlier today, the Euro Area Industrial Production, which shows the volume of production of Industries such as factories and manufacturing was released by the Eurostat. The forecast was slated for an increase of 1.1% in March 2016, compared with March 2015. However, the result was disappointing, as the increase was 0.2%.
In terms of the monthly change, there was a decline of 0.8%. The report stated that “decrease of 0.8% in industrial production in the euro area in March 2016, compared with February 2016, is due to production of non-durable consumer goods falling by 1.9%, capital goods by 1.1%, intermediate goods by 0.8% and durable consumer goods by 0.4%, while production of energy rose by 2.0%”.
Overall, the Euro is trading positively, but we need to see whether it can retain momentum above the triangle or not.
