By: DailyForex
There is an increase of risk appetite among investors despite thin liquidity in the markets due to holiday season, however, the EUR/JPY succeeded in testing a new record level at the 134.97 resistance, the highest level since October 2015. We highlighted in previous analysis that the upward chance is still technically the strongest for the EUR/JPY, as shown on the daily chart. The pair ignored the political worries with the victory of pro-independence parties in the recent Catalonian elections. The EUR/JPY is still the pest performing pair of the JPY, with increased risk appetite, especially with the passage of the US tax cut law.
We have consistently mentioned in previous analysis that buying the pair from each downward bounce is the best strategy for this pair. The pair is waiting for more risk appetite to have an upward chance. The ECB didn’t provide any update regarding their monetary policy, maintaining the interest rate as is, the Draghi’s comments were normal, and the Euro didn’t have any reactions with the any other major currency.
Technically:
The EUR/JPY is currently in a strong bullish move, and the nearest resistance levels are currently at 135.45 and 136.60, with the nearest support levels are at 134.20, 133.50 and 132.70. We still prefer buying the pair at each downward bounce. In light of market closer due to holidays this week and early next week for Christmas and New Year, traders need to be alert of price gaps due to markets coming back in interrupted form sometimes, and it is better to avoid trading until the markets are fully back to normal.
On the economic data front:
Today’s economic will focus on the Japanese manufacturing production and retail sales data. From the Eurozone, the ECB will announce its inflation report. The pair will be on the watch for any developments regarding the move towards safe heavens led by the JPY in case of more geopolitical worries regarding the conflict between North Korea and the US, or the political worries in the Trump administration.