EUR/JPY Violates Bearish Trendline – Brace for a Buying Signal
Arslan Butt • 1 min read
The safe-haven currency Japanese yen is losing its power in the wake of faded safe-haven appeal. The EUR/JPY pair was facing strong resistance around 117.400 which got violated earlier today.
The safe-haven appeal for Japanese yen faded after China’s Commerce Ministry stated that its trade team is likely to have have high-level trade negotiations with the US in early October.
Until the trade talks are done, both nations are expected to refrain from inflicting additional tariffs which may give a boost to stock markets and may keep safe-haven assets bearish.
On the other hand, the single currency Euro is still getting stronger despite having weaker Manufacturing data from Germany.
Federal Statistical Office (Destatis) reports that new orders in manufacturing had declined in July 2019 to a seasonally and calendar adjusted 2.7% on the prior month.
For June 2019, revision of the preliminary outcome resulted in an increase of 2.7% compared with May 2019 (provisional: +2.5%)
EUR/JPY – Technical Analysis
EUR/JPY has violated strong resistance around 117.400 earlier today. The 3-hour chart has closed a spinning top candle outside the bearish trendline, which is suggesting bullish bias among traders.
The RSI and Stochastics are holding in the buying zone, suggesting bullish trend in the EUR/JPY. The pair may face immediate resistance around 117.900 and violation of this can extend the bullish trend until 118.200.
The 50 and 100 periods EMA are suggesting bullish bias, and are extending support around 117.400 area.
EUR/JPY – Technical Levels
Key Trading Level: 117.03
EUR/JPY – Trade Plan
We have just opened a forex trading signal to enter a buy trade at 117.67 with a stop loss below 117.27 and take profit at 117.97.