EURJPY Analysis 10th July Preview – Euro Halts Decline Versus Yen After ECB Comments
The dollar and yen showed initial strength on Monday the 9th July; inflation data from China (CPI) gave cause for concern, showing growth is slowing, creating additional demand for a safe haven. However, the 17 nation common currency found a bid after seeing a decline to the lowest level in over a month versus the Japanese yen.
ECB Draghi Comments Boost Euro
ECB (European Central Bank) Draghi indicated policy makers might be open to further rate cuts if warranted. This has seen the euro gain versus the safe haven US dollar and Japanese yen currencies.
EURJPY Technical Update
- On Friday the EURJPY took out the key 98.31 28/6/2012 daily low. Price is now trading just below this level after euro strength was seen today. This level could potentially see some kind of resistance if hit and marks the outer area of a “choppy” previous support zone.
- In the event of a major short squeeze for the euro the 100.00 major round number is seen as the key upside level. This could very quickly come into play if the ECB shocks the market with any major positive news. More likely would be a slow corrective move higher into this area if no negative data is seen.
- On the other hand the 95.00 area proved to be a strong demand level when last hit. This is around 300 pips under the current price action.
- Key event risk data this week includes US Trade Balance, Unemployment Claims, PPI and Consumer Sentiment. Chinese Trade Balance data is due on the 10th July with GDP on Friday 13th.
- A EURJPY daily chart follows: