26 Jul 2013
EUR/JPY tumbling for second day in a row following Japanese CPI data
FXstreet.com (Barcelona) - After a strong month-plus rally from 125.16 to 132.73, the EUR/JPY cross is pulling back for a second straight session following higher-than-expected Japanese inflation data.
Japanese CPI data comes in hot – boosting the Yen and sinking the EURJPY Friday
At 23:30 GMT, CPI data out of Japan was released. The numbers came in higher-than-expected on both the headline and the core numbers. Traders initially reacted by bidding up the EURJPY, but that move turned out to be a head fake as intense selling took over the action just before 01:30 GMT. The move lower from 131.86 at the post-news peak to recent levels near 131.18 shows building short-term bullishness in the Yen – a trend that has been percolating since last Sunday’s Japanese elections.
EUR/JPY technical overview
Tim Thielen, CMT and author of The Sea Change Report, has been calling for a correction lower in the EUR/JPY which he says should result more from Yen strength than euro weakness in the short-term. Soon, though, he says that euro futures should top out – which may serve to accelerate the downside action in EUR/JPY. Thielen’s call is for EUR/JPY to eventually trade down to at least 127.50. Sort-term support for EUR/JPY comes in at Tuesday’s intraday low of 130.78 and is followed by additional support at the 7/10 low of 128.00. Short-term resistance comes in at Wednesday’s high of 132.73with May 22’s spike high of 133.805.
Japanese CPI data comes in hot – boosting the Yen and sinking the EURJPY Friday
At 23:30 GMT, CPI data out of Japan was released. The numbers came in higher-than-expected on both the headline and the core numbers. Traders initially reacted by bidding up the EURJPY, but that move turned out to be a head fake as intense selling took over the action just before 01:30 GMT. The move lower from 131.86 at the post-news peak to recent levels near 131.18 shows building short-term bullishness in the Yen – a trend that has been percolating since last Sunday’s Japanese elections.
EUR/JPY technical overview
Tim Thielen, CMT and author of The Sea Change Report, has been calling for a correction lower in the EUR/JPY which he says should result more from Yen strength than euro weakness in the short-term. Soon, though, he says that euro futures should top out – which may serve to accelerate the downside action in EUR/JPY. Thielen’s call is for EUR/JPY to eventually trade down to at least 127.50. Sort-term support for EUR/JPY comes in at Tuesday’s intraday low of 130.78 and is followed by additional support at the 7/10 low of 128.00. Short-term resistance comes in at Wednesday’s high of 132.73with May 22’s spike high of 133.805.