- Euro gained bids against the Japanese Yen recently, and may trade higher towards the 125.20 area.
- There is an expanding triangle pattern formed on the hourly chart of the EURJPY pair, which may pave the way for more gains in the near term.
- Euro Zone Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics posted a decline from 51.6 to 51.5 (preliminary) in April 2016.
- Euro Zone Services PMI posted a minor increase from 53.1 to 53.2 (preliminary) in April 2016.
The Euro after trading close to the 125.00 level once found sellers and traded down. However, the EURJPY is still bullish, and there is an expanding triangle pattern formed on the hourly chart, which may act as a catalyst for a move higher.
The pair may move higher towards the 1.236 extension of the last drop from the 124.96 high to 123.96 low.
The pair is placed well above the 100 and 200 hourly simple moving average, which is a positive sign and that’s why one may consider buying dips.
Euro Zone Manufacturing PMI
Today, the Euro Zone Manufacturing Purchasing Managers Index (PMI) that helps in capturing business conditions in the manufacturing sector was released by the Markit Economics. The forecast was lined up for a rise from 51.6 to 51.8 in April 2016. However, the report stated that the preliminary reading declined to 51.5.
However, on the other hand, the Euro Zone Services PMI posted a minor increase from 53.1 to 53.2 (preliminary) in April 2016. The report added that “PMI suggests the pace of economic growth at the start of the second quarter is marginally weaker than the average seen in the first quarter, and slightly slower than the average seen last year”.
Overall, the result was not encouraging, but may not affect the Euro in the near term. There is a chance of a move higher in the EURJPY pair.