Key Points
- The Euro surged higher versus the Japanese yen and looks set for more gains in the near term.
- There was a major bearish trend line on the 4-hours chart of the EURJPY pair, which was broken to clear the way for more gains.
- The Euro Zone Manufacturing Purchasing Managers Index (PMI) was released by the Markit Economics earlier today.
- The market was expecting no change from 51.8, but there was a decline to 51.7 in August 2016.
EURJPY Technical Analysis
The Euro found strong buying sentiment recently versus the Japanese yen and surged higher. The upside move was strong and broke a couple of key resistances, including a major bearish trend line on the 4-hours chart of the EURJPY pair.
The pair also closed above the 21 hourly simple moving average. So, there are chances of it gaining further ground and surging higher.
The next resistance on the upside can be the 76.4% Fib retracement level of the last drop from the 116.90 to 112.32.
Euro Zone Manufacturing PMI
Today during the London session, the Euro Zone Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was released by the Markit Economics.
The forecast was lined up for no change in August 2016. However, the outcome was lower, as there was a decline to 51.7 from 51.8 in August 2016. The report added that “The final Markit Eurozone Manufacturing PMI® posted 51.7 in August, a three-month low and down further from June’s year-to-date high. The final reading was also a tick below its earlier flash estimate of 51.8. The PMI has now signalled growth for 38 consecutive months, marking a continuation of its survey-record unbroken sequence above the 50.0 stagnation mark“.
Overall, the Euro may continue to gain ground versus the Japanese yen in the short term.
