Eurozone Inflation Slips, another Headwind for EUR/JPY
The single currency euro got another hit after worse than expected CPI figures. Inflation unexpectedly slid in April as prices of services..
The single currency euro got another hit after delivering worse than expected in the CPI figures. Inflation unexpectedly slid in April as prices of services rose at a moderate pace, raising questions about the European Central Bank’s policy for a gradual removal of a monetary stimulus.
ECB is targeting a 2% inflation rate, but as of Jan 2018, they are consistently deliveringnegative figures. Just today, the inflation of 19 countries fell down to 1.2% vs. the 1.3% previous level. There’s not much movement in the market, but it’s still leaving a question mark regarding the ECB’s effort to meet the 2% inflation target.
EUR/JPY – 2 Hour Chart
Technically speaking, the bearish trendline of the 2 – hour chart is providing solid resistance at 131.600. As per the 50- period EMA, the EUR/JPY is trading on a bearish trend and that’s why we should be looking for bearish trades. The RSI is also holding below 50, supporting the selling bias of investors.
EUR/JPY – Trading Plan
In addition to the fundamentals and technical reasons discussed above, we open a forex trading signal to sell EUR/JPY after a formation of dojicandle below 131.580. The pair is likely to target 131 and 130.850. Good luck!
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