Technical Bias: Bearish
- Euro traded towards 137.60 against the Japanese Yen where sellers defended gains successfully.
- Euro Area Current Account published by European Central Bank posted a surplus of €25.4 billion, more than the forecast.
- Euro Area Construction Output was also released during the London session by the Eurostat, which registered a decrease of -1.9% in June 2015.
- EURJPY is trading lower and looks poised for more losses in the near term.
The EURJPY remained under the bearish pressure, which can be clearly seen in the hourly chart. There is a bearish trend line formed on the hourly chart as well, which is acting as a barrier for buyers every time they manage to take the price higher.
Recently, there was a failure noted around the highlighted trend line, which was sitting around the 61.8% Fib retracement level of the last drop from the 137.90 high.
If the EURJPY pair corrects higher moving ahead, then it might face resistance around the trend line resistance area. On the downside, the pair might target a fresh low below the 137.00 handle.
Euro Area Current Account
There were a few economic releases lined up today in the Euro Area, including the Current Account and the Construction Output data. First, the Current Account, representing the net flow of current transactions, including goods, services, and interest payments was published by European Central Bank. The forecast was of a €19.2B trade surplus in June 2015. However, the outcome was positive, as the trade surplus was €25.4B.
Second released was the Euro Area Construction Output, which measures the output of the construction industry, in both the private and public sectors. The outcome was disappointing, as the seasonally adjusted production in the construction sector declined 1.9%.
Overall, there was some bearish pressure noted on the Euro, which might continue to increase moving ahead.
We can attempt a sell trade if the EURJPY pair corrects higher and trades closer to the highlighted bearish trend line.