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Market Analysis

Home » Technical Analysis » Daily » EURJPY Facing Major Hurdle On Upside

EURJPY Facing Major Hurdle On Upside

Posted by FXTimes in Daily - May 2nd, 2016 12:43 pm GMT

european_economy_euro

Key Points

  • Euro after trading lower against the Japanese Yen started to consolidate losses.
  • The EURJPY pair is currently attempting to move higher, but facing a hurdle in the form of a bearish trend line on the hourly chart.
  • Euro Zone Manufacturing Purchasing Managers Index (PMI) was released by the Markit Economics earlier today.
  • As per the report, there was an increase in the Euro Zone Manufacturing PMI from 51.5 to 51.7 in April 2016.

Technical Analysis

The Euro had a bad time against the Japanese yen recently, as it crashed from 126 to 122. The EURJPY pair also closed below the 100 and 200 hourly simple moving average, which is a bearish sign in the short term.

EURJPY

The pair is currently making an attempt to correct higher, but may face sellers near a bearish trend line on the hourly chart, which is coinciding with the 23.6% Fib retracement level of the last drop from the 126.47 high to 121.67 low.

Selling rallies near the trend line and resistance area, as long as the pair is below it.

Euro Zone Manufacturing PMI

Today in the Euro Zone, the Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was released by the Markit Economics. The forecast was of no change in the Euro Zone Manufacturing PMI from 51.5 in April 2016.

However, the outcome was positive, as there was an increase from 51.5 to 51.7 in the PMI. The report highlighted that “Conditions in the Eurozone manufacturing sector remained lacklustre at the start of the second quarter, as rates of expansion eased for both production and incoming new orders. Brighter news was provided on the employment and price fronts, as jobs growth gained momentum and deflationary pressures moderated“.

The Euro may gain some ground against the Japanese Yen, but the 122.80 resistance area holds the key.

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