Key Highlights
- The Euro traded lower recently and declined below 133.00 against the US Japanese Yen.
- There is a significant declining channel forming with resistance at 132.60 on the 4-hours chart of EUR/JPY.
- The Euro Area Construction Output increased 0.1% (seasonally adjusted) in Dec 2017, better than the forecast of -0.7% (MoM).
- Today, the German PPI report for Jan 2018 will be released, which is forecasted to increase by 0.3% (MoM), more than the last 0.2%.
EURJPY Technical Analysis
The Euro remained in a bearish bias during the past few days against the Japanese Yen. The EUR/JPY pair declined and it remains at a risk or more losses, with resistances on the upside at 132.60 and 133.00.
Looking at the 4-hours chart of EUR/JPY, there is a clear bearish trend in place. There was a break below a major support at 134.15, which opened the doors for more declines and the pair fell by more than 200 pips.
The recent low formed was 131.60 from where the pair started an upward correction. However, the upside wave faced sellers near 133.20-40. The pair is currently under pressure and is trading well below 133.00.
The pair remains in a downtrend as long as it is following a significant declining channel forming with resistance at 132.60. On the downside, supports are at 131.80 and 131.60. Below the stated 131.60, the pair could decline sharply towards 131.00.
Euro Area Construction Output
Recently in the Euro Area, the Construction Output figures for Dec 2017 were released by the Eurostat. The market was looking for a decline in the output by 0.7% compared with the previous month.
However, the actual result was better as there was a rise of 0.1% in the Construction Output (seasonally adjusted). Looking at the yearly change, there was a growth of 0.5% in the production, which was less than the forecast of +2.7%. The report added:
The average production in construction for the year 2017, compared with 2016, increased by 2.4% in the euro area and by 3.5% in the EU28. The increase of 0.1% in production in construction in the euro area in December 2017, compared with November 2017, is due to building construction rising by 0.5%, while civil engineering fell by 1.1%.
Overall, the Euro remains at a risk of more declines versus the Japanese Yen as long as it is below 133.00. On the other hand, EUR/USD may correct higher above 1.2450 in the near term.
