EUR/JPY seems to be set to increase a weeks-long downtrend!
Will the pair break a key assist zone within the subsequent buying and selling classes?
Earlier than transferring on, ICYMI, I’ve listed the potential financial catalysts that it’s essential to be careful for this week. Examine them out earlier than you place your first trades immediately!
And now for the headlines that rocked the markets within the final buying and selling classes:
Recent Market Headlines & Financial Information:
Brent crude oil costs opened the week close to two-month highs at $84 as a Houthi assault on a gas tanker within the Crimson Sea upped provide considerations
New Zealand’s commerce deficit tightened from 1,250M NZD to 323M NZD as imports (-13% y/y) fell sooner than exports (-8.7% y/y)
Spot gold costs traded above $2,030 on escalating Center East tensions and uncertainty forward of the Fed’s resolution
In a radio interview, ECB Vice President Luis de Guindos stated that the “excellent news” relating to inflation will “ultimately find yourself being mirrored within the financial coverage”
Value Motion Information
Overlay of EUR vs. Main Currencies Chart by TradingView
It’s not me, it’s EUR!
The euro was the most important loser initially of the week as merchants priced in (a) escalating tensions within the Center East, (b) uncertainty over this week’s potential market catalysts, and (c) European Central Financial institution (ECB) Vice President Luis de Guindos supporting a attainable rate of interest reduce by saying that progress on inflation will replicate on financial coverage “ultimately.” Yipes!
EUR began its descent at the start of the European session after which gained sufficient bearish momentum to commerce about 0.45% – 0.55% decrease in opposition to NZD, AUD, and CHF. It’s down throughout the board, although, with the least losses seen in opposition to USD (simply over 0.10%).
Upcoming Potential Catalysts on the Financial Calendar:
U.S. Treasury Workplace’s Quarterly Funding Announcement
Japan’s unemployment fee at 11:30 pm GMT
U.Okay.’s BRC store worth index at 12:01 am GMT (Jan 30)
Australia’s retail gross sales at 12:30 am GMT (Jan 30)
Use our new Foreign money Warmth Map to rapidly see a visible overview of the foreign exchange market’s worth motion! ️
EUR/JPY 15-min Foreign exchange Chart by TradingView
As talked about above, total danger aversion and ECB rate of interest reduce bets helped drag the euro decrease throughout the board.
EUR/JPY, specifically, was offered typically sufficient that the pair is now testing the S1 (160.06) Pivot Level line within the 15-minute time-frame. As you may see, the S1 space additionally strains up with an ascending channel assist within the chart.
Will we see a draw back breakout immediately? Other than the U.S. Treasury Workplace’s QRA, there will not be numerous top-tier studies scheduled immediately.
So, except we see spikes in USD (and USD/JPY) demand, the euro will most likely proceed to lose pips in opposition to the yen. Plus, it kinda tracks with EUR/JPY’s late January pattern.
A transparent breakout beneath the 160.00 psychological deal with places a transfer to 159.75 on the desk. A technical breakout, accompanied by a basic enhance, could even attract sufficient sellers to tug EUR/JPY to the 159.50 psychological degree or S2 (159.40) Pivot Level space.
In fact, we’re not ruling out some sort of profit-taking forward of this week’s potential market catalysts. A pull again as much as the pattern line resistance close to the 160.50 Pivot Level space remains to be attainable if merchants undertake a risk-friendly tone within the subsequent buying and selling classes.
For now, although, it seems to be like EUR/JPY is leaning in direction of ready for a catalyst to increase its downtrend. Watch this setup intently, yo!
