EUR/JPY has been quite bearish today after breaking above the 134.50 resistance area recently. EUR has been dominating for a last few weeks but despite positive economic reports today EUR lose some grounds during JPY bank holidays. Today EUR Spanish Unemployment Change report was published with a significant decrease to -61.5k from the previous figure of 7.3k, which was expected to be at -58.7k, and German Unemployment Change was also published with a greater decrease to -29k from the previous figure of -20k which was expected to be at -13k. On the JPY side, due to bank holidays, no economic report or event was held today, but tomorrow JPY Final Manufacturing PMI report is going to be published which is expected to be unchanged at 54.2 and Monetary Base report is going to be published on Friday, which is expected to have a slight decrease to 13.0% from the previous value of 13.2%. To sum up, despite strong economic reports, EUR lost momentum without any economic report or event on the JPY side, which means the market sentiment is currently favoring JPY, it might be for a retracement or for a counter that will be confirmed after the JPY economic reports are published this week. If the economic reports from Japan are positive and EUR fails to stop the bearish gains, then JPY is expected to recover further in the coming days.
Now let us look at the technical view. The price is currently forming a bearish engulfing candle, which is expected to work as a bearish injection in the market for further downward move in this pair. As the price moves towards the 134.50 area, it is anticipated that the price will reject the bears off the level and proceed to move further upward in the coming days with a target towards the 137.50 area. As the price remains above 134.50 with a daily close, the bullish bias is expected to continue further.
