EURJPY
Yen has been weakening along with the Dollar against most currencies as a risk-on sentiment continues to course through global markets. Meanwhile Aussie remains the outperformer so far amid the Australian trade data and the retail sales beat but also the positive China sentiment and good domestic data.
On the economic data front, the latest data out of the Eurozone confirmed again that the manufacturing sector in particular has been hit by global trade tensions and Brexit uncertainty, while the services sector is actually holding up, as the labour market continues to improve and the domestic economy remains strong. Eurozone Services PMI revised up to 53.3 from the 52.7 reported initially and versus 52.8 in the previous month. The Composite PMI is still down from 51.9 in February.
The release of data kept Euro crosses on bid, as EURUSD lifted at 1.1252, while EURJPY ascended further into two-week high terrain, after breaking the confluence of 20- and 50-day SMA and the R3 for the day.
The intraday picture, which presents a strong positive configuration of the momentum indicators, comes in contrast with the medium term outlook which remains in line with the decline set since January 28. Intraday indicators meanwhile, even though they reached overbought territory, continue to suggest that there is further space to the upside for now. RSI is at 73, Stochastic at 87.80 while MACD extends its line away from signal line.
The asset could find next Resistance at 125.65 (61.8% Fib. level since March 20 ), while a return below R3 and the latest up fractal at 125.20, could suggest that the pair is about to make a correction on the extreme breakout seen since last night.
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Andria Pichidi
Market Analyst
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