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EUR/JPY: JPY Retail Trade miss provides support in early Tokyo

2018-2-28 10:24:18Market Analysis
EUR/JPY: JPY Retail Trade miss provides support in early Tokyo

The EUR/JPY has been climbing in early Wednesday trading following a volatile Tuesday, currently trading into the 131.45 level at the start of Tokyo markets.


The pair whipped on Tuesday as the Euro and the Yen traded blows through the day, culminating in the two currencies competing following a bullish turnout from the Fed's Jerome Powell that sent market sentiment swinging. The Yen appears to have lost the upper hand at the start of the Tokyo trading session on the back of disappointing Retail Trade figures, with the headline year-on-year figures coming in at a disappointing 1.6% versus the forecast 2.1%.


The Euro will see a busy Wednesday with a slew of data to come out early in the day, but the key component will be the Eurozone CPI due at 10:00 GMT. Market estimates of 1.1% for Core CPI are calling for a minor uptick over the previous 1.0% figure, while year-on-year data for full-basket CPI is expected to contract slightly, at 1.2% versus the previous 1.3%.


Japanese data is largely muted this week but will see Foreign Investment late today at 23:50.


EUR/JPY Technicals


The pair is currently testing into the 200-day SMA while H4 charts show a continuation of the descending channel following yesterday's bounce off the upper bound at 132.18. Support is priced in from 130.93 and 130.60, with resistance piling up from the 132.00 handle to 133.05. With support thinning on the charts, a break lower could see the pair enter a new stage of bearish play as the way opens up for sellers