EUR/JPY has been quite corrective and volatile at the edge of 129.50 area recently. The price is currently expected to fall lower with a target towards 125.00 area in the coming days. Though JPY was getting weaker due to sluggish inflation this year, EUR is also domed to struggle for gains as well.
EUR has been quite positive amid recent economic reports, including unchanged Unemployment Rate at 8.4% and a slight decrease in Manufacturing PMI. Today, French Government Budget Balance report was published with an increase of deficit to -55.1B from the previous deficit of -54.3B, Spanish Unemployment Change failed to meet the expectation of -101.0k as it showed -90.0k, increasing slightly from -83.7k, PPI report was published with an increase to 0.8% from the previous value of 0.0% which was expected to be at 0.4%, and Retail Sales showed a slight increase to 0.0% from the previous value of -0.1% which was expected to be at 0.1%.
On the other hand, Japan's Average Cash Earning report which is due on Friday which is expected to increase to 0.9% from the previous value of 0.6%. Today, JPY Monetary Base report was published with a decrease to 7.4% from the previous value of 8.1% which was expected to increase to 8.3%.
As for the current scenario, despite the worse economic report from Japan today it managed to gain certain momentum over EUR whereas EUR has been mixed with the reports published today. As the trade war tensions are going on, EUR is expected to lose momentum over JPY in the process. The market is likely to be volatile and corrective in the coming days whereas JPY is expected to have an upper hand.
Now let us look at the technical view. The price has been quite indecisive with the recent daily candle below 129.50 area. The price is expected to sink lower towards 125.00 area. Apart from the recent rejection off the level, the price has also formed a Bearish Divergence in the process which is expected to contribute to the upcoming bearish momentum. As the price remains below 129.50 area with a daily close, the bearish bias is expected to continue further.
