Key Points
- The Euro traded higher against the Japanese yen, and looks set for more gains moving ahead.
- There is a bullish trend line formed on the hourly chart of the EURJPY pair, which is acting as a support area.
- The Euro Zone CPI released by the Eurostat posted an increase of 0.2% in June 2016, which was in line with the forecast.
- The Euro Area Trade Balance released by the Eurostat posted a trade surplus of €24.5B, less than the forecast of €25.2B.
Technical Analysis
The Euro recently gained traction against the Japanese yen and traded above the 118.00 level, but later found offers. However, it remains in an uptrend, as there is a bullish trend line formed on the hourly chart of the EURJPY pair, which is providing support to the pair.
The pair is currently finding bids near the trend line support and the 50% Fib retracement level of the last wave from the 116.68 low to 118.41 high.
If the EURJPY pair bounces from the current levels, then there are chances of more gains in the near term.
Euro Zone CPI
Earlier today, the Euro Zone CPI, which captures the changes in the price of goods and services was released by the Eurostat. The market was expecting a rise of 0.2% in June 2016, compared with the previous month, and the result was in line with the forecast.
The report stated that “In June 2016, negative annual rates were observed in thirteen Member States. The lowest annual rates were registered in Cyprus (-2.0%), Bulgaria (-1.9%) and Croatia (-1.2%). The highest annual rates were recorded in Belgium (1.8%), Sweden (1.2%) and Malta (1.0%). Compared with May 2016, annual inflation fell in two Member States, remained stable in eight and rose in seventeen“.
Overall, the Euro may continue to gain bids against the Japanese yen, and could break the 118.00 resistance area.
