- Euro weakened against a basket of currencies recently, including the Japanese Yen.
- There was a downside reaction in the EURJPY pair, putting the pair at a risk of more downsides in the near term.
- Japanese Money Supply M2+CD released by the Bank of Japan registered an increase of 3.6% in October 2015, which was a bit less than the last gain of 3.8%.
- German wholesale price Index released by the Statistisches Bundesamt Deutschland posted a decline of -0.4% in October 2015, compared with the preceding month.
The Euro faced a lot of sellers recently against the Japanese Yen. The EURJPY pair traded lower and tested the 131.50-60 support area. It is now forming a breakout pattern on the 4-hours chart in the form of a triangle.
We need to see which way the pair break, but the possibility of it heading lower is more as there are many hurdles on the way up including the 100 MA (4H).
The 4-hours RSI is below the 50 level, pointing towards more losses moving ahead.
The German wholesale price Index that shows value of sales made by wholesalers in Germany was released by the Statistisches Bundesamt Deutschland. The market was not expecting an increase in the WPI in October 2015, compared with the preceding month. The outcome was mixed, as there was a decline of 0.4%. The report stated that “the selling prices in wholesale trade decreased by 1.6% in October 2015 from the corresponding month of the preceding year. In September 2015 and in August 2015 the annual rates of change were –1.8% and –1.1%, respectively”.
In short, there was nothing to cheer for the Euro buyers and might push the Euro pairs lower in the near term.
Moving ahead, there is a chance of a test of the last swing low of 131.60.