Bearish Channel Extends Resistance to EUR/JPY – Eurozone CPI Disappoints
Arslan Butt • 1 min read
The trading in the safe haven cross EUR/JPY has been mostly sideways as the pair is stuck in a narrow range of 118.060 – 117.600. On the 2 hour timeframe, EUR/JPY has formed a bearish channel which is suggesting a bearish trend.
Lately, the disappointing Euro area inflation rate of 0.9% has dragged the demand for single currency Euro lower. The inflation figures slipped lower from 1.0% in August to 0.9% in September, adding further concerns to Eurozone’s economic health.
In the Euro area’s inflation, the main components are food, alcohol & tobacco, which are expected to have the highest annual rate in September.
The Japanese yen as a single currency remains mostly stronger and set to outperform its Group-of-10 peers by the end of 2019. The safe-haven Yen grew almost 3% to 105 per dollar, and one of the primary reasons behind such demand is the global economic slowdown and the US-China trade war, which is keeping the Japanese yen at peak.
The EUR/JPY pair is still keeping the trend bearish, having resistance at 118.100 and support at 117.600. The 50 periods EMA is also suggesting a bearish bias for EUR/JPY.
On the leading indicator’s side, the RSI and Stochastics are signaling a bullish trend.
A bullish breakout of 118.200 level can lead the EUR/JPY pair towards 118.450 and 118.700. Alternatively, the bearish breakout can cause EUR/JPY to drop further to 117.400.