By: DailyForex
The EUR/JPY is established around 135.60 level for the 4th day in a row, which created a cluster threatens to have a corrective moves of profit taking at any time, leading to a drop in this pair. The pair is still awaiting stronger stimulates to continue the bullish move which took this pair to its highest levels since October 2015, that is more than 2 years, in light of more risk-on sentiment among investors with the USD dropping, and the investors starting to interact with the market after the holidays, in addition to comments from the ECB’s head around the near end of the bank’s stimulation plans, entering in the race of tightening policies with other central banks. 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 a stronger upward chance. The ECB didn’t provide any updates regarding their monetary policy, maintaining the interest rate as is, and 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 135.55 and 136.60, with the nearest support levels are at 134.90, 134.20 and 133.50. We still prefer buying the pair at each downward bounce. More sentiment means more gains for this pair.
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On the economic data front:
Today’s economic is not expecting any important data from Japan. From the Eurozone, there will be an announcement of the services PMI. 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.