Key Points
- The Euro after trading as low as 115.47 against the Japanese yen managed to gain bids and traded higher.
- There is a bearish trend line formed on the hourly chart of the EURJPY pair, which is acting as a resistance.
- Today in the Euro Zone, the Economic Sentiment was published by the ZEW.
- The result was very disappointing, as there was a nasty decline in the index from 20.2 to -14.7 in July 2016.
Technical Analysis
The Euro dropped against the Japanese yen towards the 115.50 level before starting a recovery. The EURJPY pair is currently trading positive, but facing a resistance near a bearish trend line formed on the hourly chart.
However, the pair is above the 21 hourly simple moving average, which is a positive sign and may take it further higher.
Only a close below the 21 hourly SMA can take the pair further down in the near term.
Euro Zone ZEW Economic Sentiment
Today in the Euro Zone, the Economic Sentiment, which measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic was published by the ZEW.
The result was very negative, as there was a nasty decline in the index from 20.2 to -14.7 in July 2016. The report added that “The ZEW Indicator of Economic Sentiment for Germany decreased sharply in July 2016. The index has decreased by 26.0 points compared to the previous month, now standing at minus 6.8 points (long-term average: 24.3 points). This is the indicator’s lowest reading since November 2012”.
The result is stopping the Euro to gain bids against the Japanese yen, but there are chances of it breaking the highlighted trend line and resistance area.
