Eurjpy On Backfoot Ahead Of Hicp

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Eurjpy On Backfoot Ahead Of Hicp

Eur/Jpy On Backfoot Ahead Of Hicp

The EUR/JPY is trading near 172.45 with a neutral to bearish overtone on Wednesday. It appears that the traders are playing it safe as we are only a few hours away from June's HICP (Eurozone Harmonized Index of Consumer Prices).

After that, the next key event is the interest rate decision from the European Central Bank (ECB) due on Thursday. The general expectation is that the ECB will make no changes to the interest rate at the meeting.

Eur/Jpy Bearish Below 100 Ema

The H4 chart of the EUR/JPY shows a bearish outlook at the cross, which is still under the 100 EMA. The only way for the EUR/JPY to turn bullish on the H4 chart is to successfully break the 100 EMA near the 172.75. In fact, the RSI also hovers around 42.15, a sign of persistent bearish momentum.

So, the path of least resistance for the EUR/JPY is the downside unless the upcoming data from Europe delivers a major hawkish surprise.

On the way up, the first resistance for the EUR/JPY is around 172.75 or the 100 EMA. Once the 100 EMA is reclaimed by the bulls, the next stop will be 173.21, the upper range of the Bollinger Bands (2.0 - 20.) Any more bullish pressure will mean revisiting 173.80, the low from 4th July.

On the way down, the first support is around 171.82, the lower range of the Bollinger Bands. Any more selling will expose the area around the 170.90 - 170.85. However, the strongest resistance is around 170.00, which will be a tough nut to crack.

The overall sentiment of the EUR/JPY is in favor of the Japanese Yen for the time being. However, we already know that JPY has proven itself as one of the worst currencies this year. That's why it is safe to say that the downtrend in the EUR/JPY will be short-lived & a trend shift is just around the horizon.

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