EUR/JPY breakdown through the confluence area February 14, 2018

Free $50 Forex No-Deposit Bonus

The currency pair decreased significantly today and resumed the bearish movement. EUR/JPY has broken through a very strong confluence area, a valid breakdown will accelerate the sell-off. Price dropped because the Yen dominates the currency market as the Nikkei stock index is trading in the red.

The JP225 dropped today but failed to reach the 20917 the yesterday’s low. The index is still under selling pressure after the failure to reach and retest a broken dynamic support.

A Nikkei’s further drop will send the Yen much higher versus its rivals. Price has squeezed a little in the last hours, this could be a natural move on the short term because it could try to test and retest the broken support levels before will resume the downside movement.

The Yen increased significantly in the first part of the day, even if the Japanese data have failed to impress, the Prelim GDP rose by 0.1% in the fourth quarter, less versus the 0.25 estimate and versus the 0.6% growth in the Q3, while the Prelim GDP Price Index increased by 0.0%, matching expectations. The Euro-zone data have come in mixed today, the German Prelim GDP increased by 0.6%, matching expectations, the German Final CPI dropped by 0.7% in January as expected, while the Euro-zone Flash GDP surged by 0.6%, matching expectations as well. The Euro-zone Industrial Production increased by 0.4%, more versus the 0.1% estimate, while the Italian Prelim GDP increased only by 0.3%, less compared to the 0.4% estimate.

The rate has broken through the confluence area formed between the lower median line (lml) of the blue ascending pitchfork with the upper median line (UML) of the red ascending pitchfork. A false breakdown will signal an oversold and a potential upside momentum.  A retest of the broken levels will confirm a further drop on the daily chart.

Personally, I believe that only a Nikkei’s significant increase will force the EUR/JPY come back in the buyer’s territory.

Copyright © 2018. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.