Key Points
- The Euro moved down sharply against the Japanese yen and traded below 121.00.
- There is a descending channel pattern with support at 120.30 formed on the hourly chart of EURJPY.
- The Bank of Japan Monetary Policy Meeting Minutes released earlier today helped yen in gaining bids.
- The EURJPY pair is currently approaching a major break down with support just around 120.40-120.30.
EURJPY Technical Analysis
The Euro started a downside move from the 122.50 resistance against the Japanese yen, and dived below the 122.00 and 121.00 support levels. The EURJPY pair also traded below the 21 hourly simple moving average at 121.10, igniting more losses in the short term.
The pair is currently trading near a descending channel pattern support at 120.30 on the hourly chart, which is holding losses.
If there is a break below the channel pattern at 120.30, there is a chance of EURJPY trading towards 120.00. On the upside, an initial resistance is around a bearish trend line and the 23.6% Fib level of the last decline from the 121.84 high to 120.34 low at 120.69.
Japan All Industry Activity Index
Today in Japan, the All Industry Activity Index for Jan 2017 was released by the Ministry of Economy, Trade and Industry. The market was expecting the indicator that captures the monthly change in overall production by all industries of the Japanese economy to increase by 0.1% in Jan 2017, compared with the previous month.
The outcome was as forecasted, as there was a rise of 0.1% in the All Industry Activity Index, compared with the last -0.3%. Similarly, other reports like the Merchandise Trade Balance Total released by the Ministry of Finance were positive, and helped the Japanese yen in gaining bids vs the euro.
Overall, the Euro might struggle, and there are chances of EURJPY breaking the 120.30 support for a move towards 120.00.
