MO EURJPY 12.10.2018
38650
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MO EURJPY 12.10.2018

Long Term Overview:

Economic Analysis

We have seen some recent strengthening of Japanese industrial production however deflationary factors and Average Cash Earnings remain a significant concern within the Japanese economy, as a result, these ongoing depreciation factors within the Japanese economy may combine to see a continued drop in the JPY long term. This paried with the JPY Preliminary GDP QoQ figure coming in much less than previous, suggests that the JPY may continue to see weakness in the Medium – Long term.

In recent weeks the market has seen Euro Zone bond yields reassert themselves as a major influencing factor in terms of EUR stability. With ongoing Italian budget negotiations likely to continue to destabilise the EUR in the near term. With recent Brexit negotiations are looking none favourable for the Euro, with the looks of a Brexit deal getting through parliament being of low probability.

Long Term Analysis

The EURJPY is in a 5-year bearish channel. Price has been in its upper bearish tripwire area, where since then the Sellers have pushed price to the short side. However, EURJPY has been moving sideways, while sitting above its Major EMAs, for 7 months now; using the Monthly 21EMA as its equilibrium point. Nevertheless, price is still dropping in Bullish momentum on the Monthly chart presented and the previous months candlestick formation of a doji on the Monthly, suggests that EURJPY may continue to push to the short side, reaching previous lows nearing the 124.62 area, in the next couple of Months.

 

Decision Point: Close beneath the Monthly 50EMA area

Long Term Trend: Short

Channel Range: Descending: 2300pips

Possible Bias: Short

Medium Term Analysis

The Medium-Term bias for the EURJPY is bearish, with price breaking out of its upper bearish tripwire area. After seeing some indecision, the third previous week, with the formation of a fake hanging man candlestick, price has since then reverted further to the short side; price even gapped up from last weeks close by over half a percent, where since the EURJPY has continued to revert to the downside.  The discrepancy between the EU and Britain over Brexit negotiations and ongoing domestic economic issues within the Euro Zone remain unfavourable for the Euro in the Medium Term. With these factors in mind, Price may fall short to previous lows nearing the 126.71 area, in the next couple of weeks.

 

Decision Point: Close beneath the Weekly 200EMA area

Long Term Trend: Short

Channel Range: Descending: 2300pips

Possible Bias: Short