Current trend
At the beginning of the week, the EUR/JPY pair continued declining. However, it should be noted that the dynamics in the pair has been quite mixed due to various macroeconomic statistics and active speculations on further actions of the world's central banks.
On Tuesday, the European currency gained support from favorable Business Climate statistics, released in Germany. In November, the indicator came in at 109.0, above the forecast of 108.2.
The Japanese currency, in its turn, was supported by strong Nikkei Manufacturing PMI. According to preliminary data, November’s PMI grew from 52.4 to 52.8, while a decline to 52.1 points was expected.
Support and resistance
Bollinger Bands indicator on the daily chart is developing downward dynamics. The price range is widening actively, but is failing to keep pace with the current volatility. MACD still continues its strong downward trend. Stochastic is in the oversold zone and trying to turn up.
According to Bollinger Bands and Stochastic indicators, an upward correction may form in the short term.
Support levels: 130.19 (24 November low), 129.80, 129.13, 128.80.
Resistance levels: 130.63, 131.00 (near 23 November high), 131.47, 131.84, 132.22, 132.75 (12 November high), 133.18 (9 November high).
Trading tips
Long positions can be opened after the breakout of the level of 130.80 (with appropriate indicators signals) with targets at 131.50, 131.90 and stop-loss at 130.50. Validity – 1-3 days.
Short positions can be opened after the breakdown of the level of 130.20 with the target at 129.00 and stop-loss at 130.40. Validity – 2-3 days.