Technically, the EUR/JPY upward chance is still stronger as shown on the daily chart. The pair’s gains stopped around the peak at 134.88, the highest for this pair since November 2015, before the pair made a correction reaching towards 133.90 at the beginning of yesterday’s trading, and established upward at the time of writing around 134.50, awaiting stronger stimulations for more risk appetite helping the pair achieving higher gains. The pair ignored the political worries with the victory of pro-independence parties in the recent Catalonian elections. The EUR/JPY is still the pest performing pair of the JPY, with increased risk appetite, especially with the passage of the US tax cut law.
eWe have consistently mentioned in previous analysis that buying the pair from each downward bounce is the best strategy for this pair. It is clear on the daily chart that the peak of 134.45 is still strong, which the pair tried to break through a number of times, and that the current bounce might stop there and the pair would retreat if it didn’t find stronger support to break through and test stronger peaks. The Eurozone inflation data didn’t provide any support to the Euro. The pair is waiting for risk appetite to have an upward chance. The ECB didn’t provide any update regarding their monetary policy, maintaining the interest rate as is, the Draghi’s comments were normal, and the Euro didn’t have any reactions with the any other major currency.
Technically: The EUR/JPY is currently in a strong bullish move, and the nearest resistance levels are currently at 135.45 and 136.60, with the nearest support levels are at 134.20, 133.50 and 132.70. We still prefer buying the pair at each downward bounce. In light of market closure due to holidays this week and early next week for Christmas and New Year's, traders need to be alert of price gaps due to markets coming back in interrupted form sometimes, and it is better to avoid trading until the markets are fully back to normal.
On the economic data front: Today’s economic agenda does not have any important data for Japan or the Eurozone. The pair will be on the watch for any developments regarding the move towards safe havens led by the JPY in case of more geopolitical worries regarding the conflict between North Korea and the US, or the political worries in the Trump administration.
