Key Highlights
- The Euro made a nice upside move and traded above the 127.00 resistance against the Japanese Yen.
- There was a break above a key bearish trend line with resistance at 1.2670 on the 4-hours chart of EUR/JPY.
- The Nikkei Manufacturing PMI for August 2018 (Prelim) increased from 52.3 to 52.5.
- Today, the Euro Zone Manufacturing PMI for August 2018 (Prelim) will be released, which is forecasted to decline from 55.1 to 55.0.
EURJPY Technical Analysis
After a major decline, the Euro found support near the 124.85-125.00 zone against the Japanese Yen. The EUR/JPY pair started a solid upward move and climbed above the 126.00 and 127.00 resistances.
Looking at the 4-hours chart, the pair traded above the 23.6% Fib retracement level of the last decline from the 131.15 high to 124.88 low. Moreover, there was a break above a key bearish trend line with resistance at 1.2670 on the same chart.
The pair traded nicely above the 127.00 resistance and it even surpassed the 128.00 level plus the 50% Fib retracement level of the last decline from the 131.15 high to 124.88 low.
If the pair continues to move higher, it is likely to test the 129.00 level in the near term, which is a key resistance and coincides with the 200 simple moving average (4-hours).
On the other hand, if there is a downside correction, the pair could find support near the 127.40 and 127.20 levels.
Economic Releases to Watch Today
- US Services PMI for August 2018 (Preliminary) – Forecast 55.9, versus 56.0 previous.
- Germany’s Services PMI for August 2018 (Preliminary) – Forecast 54.3, versus 54.1 previous.
- Euro Zone Services PMI for August 2018 (Preliminary) – Forecast 54.4, versus 54.2 previous.
- Germany’s Manufacturing PMI for August 2018 (Preliminary) – Forecast 56.5, versus 56.9 previous.
- Euro Zone Manufacturing PMI August 2018 (Preliminary) – Forecast 55.0, versus 55.1 previous.
- US Initial Jobless Claims – Forecast 215K, versus 212K previous.
- US New Home Sales for July 2018 (MoM) – Forecast +2.2% versus -5.3% previous.
