Key Points
- The Euro fell lower versus the Japanese yen, and broke the 114.00 support area.
- There was a contracting triangle pattern on the hourly chart of EURJPY, which was broken at 114.30.
- Today, the Japanese All Industry Activity Index was released by the Ministry of Economy, Trade and Industry.
- The outcome was below the forecast, as there was a rise of +0.2% in August 2016.
EURJPY Technical Analysis
The Euro traded lower recently versus the Japanese yen to break the 114.00 handle. There was also a close below the 21 hourly simple moving average and a contracting triangle pattern on the hourly chart of EURJPY at 114.30.
The pair traded as low as 113.62 where it is finding bids and currently attempting to correct higher. On the upside, it may find resistance near the 38.2% Fib retracement level of the last decline from the 114.66 high to 113.62 low.
One may consider entering a sell trade on rallies near the 21 hourly SMA with a stop above it.
Japanese All Industry Activity Index
Today in Japan, the All Industry Activity Index, which captures the monthly change in overall production by all industries of the Japanese economy was released by the Ministry of Economy, Trade and Industry.
The last reading was +0.3%, and the market was expecting a similar increase this time in August 2016, compared with the previous month. The result was mixed, and just lower, as there was a rise of 0.2%. Today, the Chinese Gross Domestic Product (GDP) released by the National Bureau of Statistics of China posted in line forecast outcome of +6.7% in Q3 2016. However, there was no major increase in the risk sentiment for the market.
Overall, it looks like the Euro has formed a downtrend against the Japanese yen, and there are chances of declines in the near term.
