Looking at the chart on the weekly time frame, we see that after the pullback to the moving averages MA50 and MA100, the trend continued in a bullish direction. After a break above the psychological level at 125,000, we can expect the EUR/JPY pair to continue to 128,000. At the end of November, a break was made above the MA200, and this is another confirmation for us to continue the bullish trend.
On the daily chart, we see that the EUR/JPY pair made a FLAG pattern and retest at 126.00. EUR/JPY is moving in a rising channel with some pullback from supporting moving averages. The latest pullback coincides with the vaccine discovery news in early November and has been a continuation of the bullish trend ever since. Our current resistance is 127,000, but we can expect the pair to move to higher levels after a short consolidation.
On the daily chart, the pair made a Head & Sholders pattern without a retest because the FLAG pattern above is active. If it is not met, we can expect a pullback that will be a retest on H&S and the bottom line of the trend with the support of MA50 and MA100.
On the four-hour time frame, we see that the EUR/JPY pair made a break above 125.00 and are now consolidating between 126-127,000. We can expect the pair to move in the coming period within that channel with a potential pullback to the bottom line of the trend to better support the Euro to continue to higher levels.
We had a report from the Bank of Japan on the interest rate from today’s news, which remained unchanged. The board voted 8-1 to keep the interest rate at -0.1 percent on current accounts held by financial institutions in the central bank.
The Bank of Japan said it was ready to assess the viability of its monetary easing policy, as consumer prices were expected to remain downward for a long time due to the impact of Covid-19.
As economic activity and prices continue to be under long-term downward pressure, there is a need to support the economy and achieve the goal of price stability of 2 percent, the bank said.
German business confidence improved in December, the results of the IFO research showed on Friday. The business confidence index rose to 92.1 in December from a revised 90.9 in November.
The expected result was 90.0. Although the lock is hitting certain sectors hard, overall, the German economy is showing resilience.
- Trading Instrument
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