- The Euro popped higher during the Asian session, as the market sentiment improved with French election.
- The EURJPY traded as high as 120.31, and now forming a contracting triangle pattern with resistance at 119.65 on the hourly chart.
- Today in Japan, the Coincident Index for Feb 2017 released by the Cabinet Office posted an increase from the last revised reading of 113.3 to 115.3.
EURJPY Technical Analysis
The Euro opened with a gap up to 120.30 against the Japanese Yen, and traded as high as 120.31. Later, the EURJPY pair found resistance and moved below 120.00.
The pair traded below the 23.6% Fib retracement level of the last wave from the 116.45 low to 120.31 high. At the moment, it is forming a contracting triangle pattern with resistance at 119.65 on the hourly chart.
EURJPY Hourly Chart
It looks like the pair remains supported since it failed to test the 38.2% Fib retracement level of the last wave from the 116.45 low to 120.31 high.
If the pair completes the contracting pattern, and break past 119.65 or 119.80, there can be a jump of roughly 40-50 pips, and the pair can trade back towards the 120.30 swing high.
The hourly RSI of EURJPY is currently stable around 69 and looking to gain momentum.
Fundamentals – Japan’s Coincident Index and German IFO
Today in Japan, the Coincident Index for Feb 2017 was released by the Cabinet Office. The forecast was slated for the Coincident Index to decline from 115.5 to 115.00 in Feb 2017.
However, the actual result was positive, as the Coincident Index posted a stable reading of 115.3. However, the last reading was revised down to 113.3, so there was an overall increase in Feb 2017. Similarly, the Leading Economic Index posted a rise from 104.7 (revised from 104.4) to 104.8.
In the Euro Zone, the German IFO business sentiment index for April 2017 was released by the CESifo Group. The market was expecting a minor increase, and the result was positive, as there was a rise from the last revised reading of 112.4 to 112.9.
Overall, the Euro may continue to head higher, and if EURJPY breaks above 119.65, it could head back towards the 120.20 level.