Key Points
- The Euro declined heavily this week and currently trading above a major support at 123.40 against the Japanese Yen.
- There are two important bearish trend lines with resistance near 124.00 formed on the hourly chart of EURJPY.
- Today in Japan, the Gross Domestic Product released by the Cabinet Office posted 0.5% in Q1 2017 (Prelim).
- The result was above the forecast, as the GDP posted 0.5%, more than the expectation of 0.4%.
EURJPY Technical Analysis
The Euro was under heavy selling pressure, and tumbled below 125.00 against the Japanese Yen. Later, the EURJPY pair found support at 123.40, and currently consolidating above the mentioned level with many hurdles on the way up.
On the upside, there are two important bearish trend lines with resistance near 124.00 on the hourly chart. These trend lines coincide with the 23.6% Fib retracement level of the last decline from the 125.81 high to 123.40 low.
As long as the pair is below 124.00, there is a risk of a breakdown. On the upside, the next resistance is at 50% Fib retracement level of the last decline from the 125.81 high to 123.40 low and the 21 hourly simple moving average.
Japan’s GDP
Today in Japan, there were a few releases like the Gross Domestic Product for Q1 2017. The market was aligned for a rise of 0.4% in the GDP in Q1 2017 (Prelim), compared with the previous quarter.
The outcome was above the forecast, as the GDP posted 0.5%, more than the expectation of 0.4%. Moreover, the foreign bond investment was released by Ministry of Finance. The outcome was positive, as it came in at ¥1,821.2B, more than the last revised reading of ¥425.8B.
Overall, the EURJPY pair may correct a few pips higher, but remains at risk of a break below 123.40.
