Key Points
- Euro after ranging for some time against the Japanese yen spiked higher and looks set for more gains.
- There was a bearish trend line formed on the hourly chart of the EURJPY pair, which was broken to clear the range resistance area.
- German Manufacturing Purchasing Managers Index (PMI) released by the Markit economics posted a rise from 52.1 to 54.4 in June 2016 (preliminary).
- Euro Zone Manufacturing Purchasing Managers Index (PMI) also posted a rise and came in at 52.6 in June 2016 (preliminary).
Technical Analysis
The Euro spiked higher against the Japanese yen recently, and broke a major resistance area in the form of a bearish trend line formed on the hourly chart of the EURJPY pair. The recent range break looks bullish, and may ignite more gains in the near term.
Currently, the pair is trading near the 1.236 extension of the last leg from the 119.47 high to 115.50 low. So, there is a chance of a minor dip before the pair can trade higher.
If you are looking to buy, then you can consider near the broken trend line area.
Euro Zone Manufacturing Purchasing Managers Index
Earlier today, the Euro Zone Manufacturing Purchasing Managers Index, which captures business conditions in the manufacturing sector was released by the Markit Economics. The forecast was lined up for no change in the PMI, but the outcome was better as there was a rise of 52.6 in June 2016 (preliminary).
The report stated that “Moderate growth was recorded in both the manufacturing and service sectors, though an acceleration in the rate of goods production, to the best seen so far this year, was offset by a weakened pace of expansion in services, the slowest for 18 months“.
Overall, the sentiment is positive for the Euro, but we need to keep an eye on Brexit outcome for the next move.
