6 Nov 2013
EUR/JPY lethargic on slightly worse EZ retail sales
FXstreet.com (Athens) – The EUR/JPY was under a small corrective trend shift during the early European trading hours, after the immense overnight gains, but after the release of slightly better than expected EZ data it regained again the uptrend momentum.
The EUR/JPY has been enjoying a mini-rally since the kick off of the Asian trading session, apart from the early European trading hours. At the time of writing, the Euro land retail sales released at slightly worse levels, whilst a bit earlier the Euro zone PMI announced at slightly better levels than expected. Elaborating on, we might consider that the soft announced data are in much consistency with the yesterday’s remarks of the ECB’s official Asmussen who mentioned that “the recovery in the union is still very, very green, even, light and fragile.” However, the Bank of America Merrill Lynch mentions that the single currency isn’t yet overvalued, but it is just very close to what the Bank calls “equilibrium range.”
Technical Aspects on the EUR/JPY
It is noteworthy to mention that the cross should overcome the 133.34 handle (50% Fibonacci retracement, also October 31st low), to move higher. On the other hand the cross hasn’t managed to make a daily decent close above that level (133.34) the past three days, which might be a bearish sign for the cross. Karen Jones Head Technical Analyst of Commerzbank mentions that “EUR/JPY …… We regard the pattern on the market as a potential rising wedge (reversal pattern) and a weekly close below the 132.01 level should be enough to complete the pattern and introduce scope to 122.80.”
The EUR/JPY has been enjoying a mini-rally since the kick off of the Asian trading session, apart from the early European trading hours. At the time of writing, the Euro land retail sales released at slightly worse levels, whilst a bit earlier the Euro zone PMI announced at slightly better levels than expected. Elaborating on, we might consider that the soft announced data are in much consistency with the yesterday’s remarks of the ECB’s official Asmussen who mentioned that “the recovery in the union is still very, very green, even, light and fragile.” However, the Bank of America Merrill Lynch mentions that the single currency isn’t yet overvalued, but it is just very close to what the Bank calls “equilibrium range.”
Technical Aspects on the EUR/JPY
It is noteworthy to mention that the cross should overcome the 133.34 handle (50% Fibonacci retracement, also October 31st low), to move higher. On the other hand the cross hasn’t managed to make a daily decent close above that level (133.34) the past three days, which might be a bearish sign for the cross. Karen Jones Head Technical Analyst of Commerzbank mentions that “EUR/JPY …… We regard the pattern on the market as a potential rising wedge (reversal pattern) and a weekly close below the 132.01 level should be enough to complete the pattern and introduce scope to 122.80.”