Eurozone jobless rate dropped to 8.8% in October from 8.9% in the previous month. Further signs that the labour market is improving and with PMI readings suggesting ongoing job creation as companies run into capacity constraints the improving trend is likely to continue. Eurozone prel Nov HICP inflation rose to 1.5% y/y from 1.4% y/y in the previous month, less than expected and with core inflation holding at 0.9% y/y, rather than nudging higher to 1.0% y/y, as Bloomberg consensus suggested. National data had been mixed and while the German rate came in a tad higher than anticipated, French and Spanish numbers ahead of today’s Eurozone release came in below estimates, and with the breakdown showing that the uptick in the headline rate was largely due to a rebound in energy price inflation, which jumped to 4.7% y/y in November from 3.0% y/y, the doves at the ECB will see this as a confirmation that underlying inflation pressures remain muted.
EURJPY, despite success in unemployment data, fell to 132.65 from 133.17 following the miss in EMU November HICP inflation. Two strong bearish candles have been identified in the hourly chart, while the 3rd consecutive candle broke the 20-period MA but it closed above 20 MA. This 3rd candle is a long legged doji candle which closed bullishly, (umbrella Doji candle), presenting the evidence of buying pressure despite the majority of seller around. Buyers resurfaced at the bottom of the hour and they successfully pushed prices 30 pips above the low of the day.
Hence with RSI at 61, and the pair moving above 20-period MA, an intra-day position at 132.95 was taken with a target at 133.20 and support at 132.75. The EURJPY is in a positive outlook the last two days, hence this drift lower identified earlier, could be considered as simply a correction move of the uptrend. The crossing is moving in the upper Daily Bollinger Bands pattern since yesterday and above 50-Day MA. Hence this intra- day position complies with the high-term judging by the RSI on the 4-hour chart and Daily chart.
The EURJPY faces a strong resistance at 133.25, which was reached 4-times the last 2 weeks. Hence another attempt at 133.25 high is anticipated within the day, after the latest bullish hourly candle seen. If the pair however manage to breach and break this 2-weeks resistance , then further upside momentum anticipated up to the next Resistance seen since September at 133.80-134.00. However on a possible upside failure of pair’s price action to break above 133.25, will indicate a retest of the support seen since September at 131.50.
Today’s closure, will be in the watch list for a possible Daily entry of the pair.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Senior Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.