The Euro (EUR) inched higher against the Japanese Yen (JPY) on Monday, increasing the price of EURJPY to more than 117.50 following the release of some key economic news. The technical bias remains bullish because of a Higher High in the ongoing upside rally.
As of this writing, the pair is being traded near 117.68. A hurdle may be noted around 118.37, the horizontal resistance area ahead of 119.00, the psychological number and then 121.62, a huge horizontal support turned resistance as demonstrated in the given below daily chart.
On the downside, the pair is likely to find a support around 116.33, the horizontal support ahead of 116.00, a key psychological level and then 113.81, the short term support zone. A break and daily closing below the 113.81 support shall incite renewed selling interest, validating a move towards the 112.63 and 112.00 support zones.
Japan Trade Balance
Japan recorded a JPY 496.2 billion trade surplus in October of 2016, 373.5 percent higher than a JPY 104.8 billion surplus a year earlier but lower than market expectations of JPY 615 billion, according to a government report. Exports declined 10.3 percent year-on-year, 13th consecutive drop and much worse than expectations of an 8.6 percent fall. Imports shrank at a faster 16.5 percent compared to forecasts of a 16.3 percent decrease.
Considering the overall technical and fundamental outlook, buying the pair on short term dips still appears to be a good strategy in near term. Alternatively, selling near 118.50 can also be a good option if we get a valid bearish reversal candle on the daily chart.