EUR/JPY has been volatile and corrective at the edge of 129.00-50 area from where the price is expected to head lower in the coming days. Both currencies in the pair have been trading with mixed dynamics amid the recent economic reports which lead the price to indecision in the process.
Today Spanish Services PMI report is going to be published which is expected to decrease to 52.1 from the previous figure of 52.6, Italian Services PMI is expected to decrease to 53.2 from the previous figure of 54.0, French Final Services is expected to be unchanged at 55.7, German Final Services is expected to remain unchanged as well at 55.2, and Final Services PMI is also expected to be unchanged at 54.4. Moreover, the eurozone's Retail Sales report is expected to decrease to -0.1% from the previous positive value of 0.3%. Despite certain tensions like ECB's risk reduction situation, EUR is still trading higher, but its momentum is expected to fade quite quickly.
On the other hand, BOJ has recognized the recent drawbacks whereas current focus is on tightening of Financial Regulations, Technological Innovation and Increased use of Future of Asset Management. JPY has been performing quite mixed recently including increase in Capital Spending to 12.8% from the previous value of 3.4% and Monetary Base decreasing to 6.9% from the previous value of 7.0% which was expected to decrease to 6.3%. On Friday, JPY Household Spending report is going to be published which is expected to increase to -0.9% from the previous value of -1.2% and Average Cash Earnings is expected to decrease to 2.4% from the previous value of 3.3%.
Meanwhile, EUR is forecasted to get weaker amid soft economic data. Whereas JPY is still quite strong fundamentally in comparison to EUR. So, JPY is expected to have an upper hand in the current market situation, leading to further downward momentum in the process.
Now let us look at the technical view. The price is currently residing inside the range of 129.00-50 area from where a daily close below 129.00 area will help bears to gain impulsive momentum in the process. Additionally, MACD showing Bearish Convergence also provides the needed indication for further bearish momentum. As the price remains below 130.00 area, the bearish bias is expected to continue further with target towards 124.50-125.00 area.
SUPPORT: 124.50, 125.50, 129.00
RESISTANCE: 129.50, 130.00, 131.00, 132.00
BIAS: BEARISH
MOMENTUM: VOLATILE
