The Euro was seen trading lower recently against the Japanese yen, as it moved towards 121.00. The EURJPY pair broke a major support near 122.00, which ignited a downside move.
When we look at the 4-hours chart of EURJPY, there was a monster triangle pattern formed with support at 122.00. Moreover, the 200 simple moving average on the same chart was also around 122.00.
There were two possible scenarios. Either the pair could have bounced or break it for a sharp downside towards 120.00. As long as the triangle pattern was intact, the pair was supported. Once there is a close below the 200 simple moving average (H4), it paved the way for further declines.
On the upside, the most important resistance is near the 38.2% Fib retracement level of the last decline from the 123.72 high to 122.10 low at 122.72. Moreover, the 100 simple moving average (H4) may also act as a hurdle on the upside near 122.70.
An initial resistance is now near the broken support at 122.00 along with the 200 SMA (H4).
Earlier during the Asian session in Japan, the trade figures were published by the Ministry of Finance. The Current Account, which is a net flow of current transactions, including goods, services, and interest payments into and out of Japan was forecasted to post a trade surplus of ¥1,500.0B in Nov 2016.
However, the outcome was a bit lower, as it posted a trade surplus of ¥1,415.5B. Moreover, the Trade Balance Total, which is a measure of balance amount between import and export posted a trade surplus of ¥313.4B in Nov 2016, which was lower when compared with the last ¥587.6B.
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