EURJPY has been moving sideways on its 4-hour time frame and is making its way closer to the range resistance at the 116.00 major psychological level. If it holds as a ceiling, price could head back south to the range support at 112.50-113.00.
The 100 SMA is above the longer-term 200 SMA on this chart for now so the path of least resistance is to the upside. However, the gap between the moving averages is narrow so a downward crossover could be possible, indicating a return in selling pressure.
Stochastic is indicating overbought conditions and is turning lower, also indicating that buyers are exhausted and could let sellers tak over sooner or later.
Data from Japan was mostly stronger than expected on Friday, as inflation and consumer spending showed some improvements for October. On the other hand, euro zone data was mixed, with France reporting weaker than expected CPI and GDP. Spain and Germany printed stronger than expected CPI.
Earlier this week, Japan reported weaker than expected preliminary industrial production and retail sales data. The former showed a flat reading instead of the estimated 0.9% gain while the latter printed a 1.9% year-over-year decline versus the estimated 1.7% drop.
Euro zone flash CPI estimates are up for release today and strong data could be enough to assure market watchers that the ECB won’t adjust its easing program yet. Analysts are expecting to see a rise from 0.4% to 0.5% for the headline figure and no change in the core figure at 0.8%. German retail sales and Italian CPI figures are also due today.
By Kate Curtis from Trader’s Way