EUR/JPY edges lower on Thursday in the early European trading hours. The pair opened higher but failed to preserve the momentum after Japan posted a jump in housing starts in August. At the time of writing, EUR/JPY is trading at 129.72, down 0.05%  for the day.

The shared currency came under selling pressure amid signs that the European Central Bank (ECB) will remain dovish for some time while the US Federal Reserve moves ahead towards tapering. ECB President Christine Lagarde has distanced the ECB from the move towards tighter monetary policy and promised not to overreact to transitory supply shocks. On the other hand, the Japanese yen managed to gain some traction after the Bank of Japan (BOJ) Governor Haruhiko Kuroda said that the central bank will maintain its massive stimulus to support the economic recovery. On the economic data front, Japan Housing grew 7.5% in August on a yearly basis whereas Retail sales in Japan fell 3.2% compared to market expectations of a 1% drop.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

EURJPY has broken above our 61.8% fibo retracement level i.e 129.76 price action and has also managed to close above the exponential moving average 50 and 200 in daily time frame but is still hovering below our strong resistance zone 130.26. A closing above the aforementioned resistance would indicate the continuation of bullish trend, as for now the pair has already provided us a closing above our upper trend line in the four hourly chart, indicating that the pair will be moving higher. On the bearish side EURJPY would need to 129.0 in order to drive the pair towards 50% fibo level and 128.10. For the continuation of bearish trend we would require a further breakout below 128.0 major support zone. 

EURJPY

Sep 30 2021