EUR/JPY has been quite corrective and volatile while residing inside the price range between 127.50 to 129.50. EUR is currently quite indecisive amid several important factors like ECB monetary policy and fiscal target achievement. On the other hand, amid upbeat economic reports JPY led to further correction.
EUR has been sensitive to political developments. EUR has been hurt by the unsettled budget crisis in Italy which is expected to cause obstacles to further economic growth in the eurozone as Italy rejects co-operation with EU authorities. Today ECOFIN meeting is being held which has already had a negative impact on the currency growth so far which is expected to lead to further EUR weakness in the coming days. Ahead of ECB Monetary Policy Meeting Accounts report to be published on Thursday, EUR is expected to struggle further in the coming days. Another headwind is a Consumer Confidence reports which is expected to reveal the unchanged index at -3.
On the JPY side, recently Japan's Trade Balance report was published with a decrease to -0.30T from the previous figure of -0.14T which was expected to be at -0.48T, but having better than expected result provided a certain gain. More gains are to follow if the upcoming economic reports like All Industrial Activity and National Core CPI come in better than expected.
In the meantime, JPY found solid support from the economic reports whereas EUR still has to assert strength to gain the required momentum and push impulsively in the coming days. Though both currencies are currently quite indecisive, JPY has a greater chance to gain momentum because EUR is set to struggle further.
Now let us look at the technical view. The price is currently residing at the edge of 128.50 area after certain indecision daily candles. The price is currently being held by the dynamic levels of 20 EMA, Tenkan, Kijun, and Kumo Cloud as resistance which is expected to push the price lower towards 127.50 and later towards 125.50 area in the future. As the price remains below 129.50, as per preceding trend the bearish bias is expected to continue further.
SUPPORT: 125.50, 127.50, 128.50
RESISTANCE: 129.50, 131.00, 132.00
BIAS: BEARISH
MOMENTUM: VOLATILE
