EUR/JPY Trades In Bullish Channel – CPI Fails to Extend Support
Arslan Butt • 1 min read
As discussed in our previous update, the bullish channel was supporting the EUR/JPY pair around 118.800. EUR/JPY bounced off above this level to post a high around 119.800 level.
EUR/JPY slips despite neutral CPI figures for the Eurozone. As per the report, the Euro area year-end inflation number was 1.0% in August 2019, steady compared to July.
A year before, the price moved by 2.1%. European Union yearly inflation was 1.4% in August 2019, firm against July’s data. Whereas, the final Core CPI y/y figure grew at the same pace of 0.9% as it was before.
EUR/JPY – Technical Outlook
As you can see on the chart below, EUR/JPY has formed a Doji candle followed by bullish waves ending at 119.800. The Doji and a bearish engulfing pattern signal odds of a bearish trend.
The Japanese cross is facing immediate support around 119.450 area, and violation of this level could trigger further selling in EUR/JPY until 119.200 and 118.800 support zones.
The RSI is still holding in the overbought zone, which may help motivate investors to take profits.
EUR/JPY – Technical Levels
Key Trading Level: 119.47
EUR/JPY – Trade Setup
I will be looking to open a sell position below 119.800 with a stop loss above 120.10 and take profit around 119.00