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The Euro traded a touch higher against the Japanese yen during this past week, but traded lower before going into the weekend. Moreover, it opened with a gap lower against the US dollar, but managed to survive against the yen. However, the pair broke an important support level, and that is a reason why the EURJPY pair might spike lower from the current levels. However, there are several support levels on the way down, which could act as a barrier for the Euro sellers in the short term.

There was a major bullish trend line on the hourly chart for the EURJPY pair, which was broken recently. The pair is currently trading around the 100 hourly simple moving average, which can be taken out easily considering the current market sentiment. However, there is an important support area around the 137.20 level. The 200 hourly moving average is sitting around the mentioned support level. Moreover, the 50% fib retracement level of the last leg higher from the 136.36 low to 137.99 high. So, there is a chance that the Euro buyers might appear around the 137.20-10 area. If it fails to hold, then it might drop all the way towards the 136.75 level.

On the upside, initial resistance can be seen around the 137.60 level, followed by the recent high of 137.99 level. There is an important economic release scheduled during the London session i.e. the German IFO business climate index will be released, which might impact the Euro in the short term.

Overall, buying dips remain a good option until the pair is trading above the highlighted support area around the 137.20 level.

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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com