24 Oct 2013
EUR/JPY tumbles below 134.00 on dismal EZ PMI data
FXstreet.com (Athens) – The EUR/JPY has been trading consistently lower since the dismal EZ PMI data released.
The EUR/JPY fell apart initially on the very discouraging Euro land data – below 134.00 - but soon managed to pare a portion of its losses and now hovering again around 134.25 area. The Euro land data showed that the power horse of Euro zone, Germany, isn’t exactly on a solid recovering path as its PMI composite index fell to a three-month low of 52.6, while the French equivalent also recorded a decline (to 50.1 from 50.5). Briefly, Euro zone’s PMI index fell from 52.2 to 51.5, showing that while Euro land is on the recovery path, the overall growth is very modest. HSBC analysts suggest that “This could come in many forms, be it rhetoric, a rate cut or renewed liquidity injections by the ECB, and stifling the EUR’s rise will be a key part of the strategy." Coincidentally, ECB President Mario Draghi said earlier today ECB officials ready to fail banks in next year's stress tests.
Technical Aspects on the EUR/JPY
Karen Jones Head Technical Analyst of Commerzbank, mentions that the “EUR/JPY EUR/JPY is seeing some profit taking from the very long term retracement at 135.33 (23.6% retracement of the move down from the 1979 high). We note in addition the TD perfected set up on the daily chart. The May high at 133.83 has seen some erosion and we would allow for some slippage to key support, which remains the 55 day ma and 4 month uptrend at 132.06/131.79.Beyond this the market remains capable of gains to 136.71, the target from the triangle, which broke up from the end of last year, which we suspect will hold the topside. Beyond here, the June 2009 high at 139.26.”
The EUR/JPY fell apart initially on the very discouraging Euro land data – below 134.00 - but soon managed to pare a portion of its losses and now hovering again around 134.25 area. The Euro land data showed that the power horse of Euro zone, Germany, isn’t exactly on a solid recovering path as its PMI composite index fell to a three-month low of 52.6, while the French equivalent also recorded a decline (to 50.1 from 50.5). Briefly, Euro zone’s PMI index fell from 52.2 to 51.5, showing that while Euro land is on the recovery path, the overall growth is very modest. HSBC analysts suggest that “This could come in many forms, be it rhetoric, a rate cut or renewed liquidity injections by the ECB, and stifling the EUR’s rise will be a key part of the strategy." Coincidentally, ECB President Mario Draghi said earlier today ECB officials ready to fail banks in next year's stress tests.
Technical Aspects on the EUR/JPY
Karen Jones Head Technical Analyst of Commerzbank, mentions that the “EUR/JPY EUR/JPY is seeing some profit taking from the very long term retracement at 135.33 (23.6% retracement of the move down from the 1979 high). We note in addition the TD perfected set up on the daily chart. The May high at 133.83 has seen some erosion and we would allow for some slippage to key support, which remains the 55 day ma and 4 month uptrend at 132.06/131.79.Beyond this the market remains capable of gains to 136.71, the target from the triangle, which broke up from the end of last year, which we suspect will hold the topside. Beyond here, the June 2009 high at 139.26.”