Key Points
- Euro after trading as high as 114.78 found sellers and started to move down against the Japanese yen.
- There was a contracting triangle pattern formed on the hourly chart of the EURJPY pair, which was broken during the downside move.
- In the Euro Zone, the PMI service was released by the Markit Economics.
- The result was positive, as there was a rise from the last reading of 52.4 to 52.8 in June 2016.
Technical Analysis
The Euro after a decent recovery against the Japanese yen towards the 114.80 level found sellers and started to move down. There was a contracting triangle pattern formed on the hourly chart of the EURJPY pair, which was broken to pave the way for more losses.
The most important point is that the pair is now below 100 and 50 hourly simple moving averages, which may encourage sellers further.
On the downside, the 50% Fib retracement level of the last wave from the 111.37 low to 114.78 high may act as a support area.
Euro Zone Services PMI
In the Euro Zone today, the PMI service, which is an indicator of the economic situation in the Euro Zone services sector was released by the Markit Economics. The market was expecting no change from 52.4 in June 2016, but there was an increase to 52.8.
The report added that “Manufacturing production registered its fastest growth in the year so far in June, and outperformed the service sector for the first time in three months. Service sector activity rose at the slowest pace in almost one-and-a-half years“.
There is a chance that the EURJPY pair may correct higher in the near term, but in that case it might find resistance near the 100 hourly SMA.
