The Euro (EUR) inched lower against the Japanese Yen (JPY) on Monday, decreasing the price of EUR/JPY to less than 119.50 following some economic news release. The technical bias remains bullish because of a higher high in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded near 119.17. A support can be noted around 118.59 (the trendline support area). A break and daily closing below the 118.50 support zone shall invalidate the yesterday’s bullish pin bar, opening door for another dip towards the 117.50 support area.
On the upside, an immediate hurdle can be seen around 119.70 (the 38.2% fib level + a short term horizontal resistance area) ahead of 121.33 (the high of February 10th) and then 123.02 (the trendline resistance area) as demonstrated in the given below daily chart. The technical bias shall however remain bullish as long as the 118.50 support is intact.
Fed Kaplan Speech
Federal Reserve Bank of Dallas President Robert Kaplan reiterated his view that policy makers should raise interest rates “sooner rather than later” and without paying excessive attention to market expectations. “I would like to be aware of what’s going on in the market, but I don’t want to overread or overreact to it,” Kaplan told reporters following a speaking engagement Monday in Norman, Oklahoma. “Market probabilities can change very rapidly,” he said. Illustrating that point, the probability that investors see for a rate hike at the Fed’s March 14-15 meeting on Monday rose to 50 percent, based on pricing in federal funds futures contracts, from 34 percent just five days ago.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels can be a good strategy.