- The Euro declined heavily until it found support at 123.15 against the Japanese Yen.
- The EURJPY pair is currently attempting a break above a crucial bearish trend line at 124.05 on the hourly chart.
- In the Euro Zone, the Germany consumer price index for April 2017 (Preliminary) released by the Statistisches Bundesamt Deutschland posted a rise of 1.5% (YoY).
EUR/JPY Technical Analysis
The Euro was in a solid downtrend recently since it broke the 125.00 and 124.50 support levels against the Japanese Yen. The EUR/JPY pair even cleared the 124.20 support and traded as low as 121.14.
Later, the pair started a recovery, and moved above the 23.6% Fib retracement level of the last decline from the 125.79 high to 121.14 low.
At the moment, the pair is attempting a break above a crucial bearish trend line at 124.05 on the hourly chart.
EUR/JPY Hourly Chart
However, the most important hurdle is near 124.20. The stated level was support, and now may prevent gains above 124.20.30.
The same area also coincides with the 38.2% Fib retracement level of the last decline from the 125.79 high to 121.14 low.
I think there is a chance of a break above the trend line at 124.05, but there can be strong offers near 124.20. So, there can be a few swing moves around 123.80-124.20 before the pair spikes higher.
Germany Consumer Price Index
Today in the Euro Zone, the Germany consumer price index for April 2017 was released by the Statistisches Bundesamt Deutschland. The market was expecting the Preliminary CPI to increase by 1.6% in April 2017, compared with April 2016.
The actual result was lower than the forecast, as the Germany consumer price index increased by 1.5%. In terms of the monthly change, the market was looking for a 0.1% decline, but the actual was -0.2%.
The report added:
In May 2017, the harmonised index of consumer prices for Germany, which is calculated for European purposes, is expected to increase by 1.4% year on year and to decrease by 0.2% on April 2017.
Overall, the EUR/JPY pair may struggle to break the 124.20 resistance, but if it succeeds, it may trade towards 125.00.