EUR/JPY battling key resistance, eyes Eurozone inflation data

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Euro / Japanese Yen (EUR/JPY) extended downside movement on Monday ahead of very crucial inflation data about Eurozone, the pair is currently battling 50% fib level resistance, if the inflation data up beats expectations, the pair might break this major resistance level to resume the uptrend.

As of this writing, EUR/JPY is being traded near 140.57; immediate resistance can be noted around 140.92 which is 50% fib level of last major move, a break above 140.92 could expose 142.00 i.e. psychological level and 61.8% fib level. Above 142.00 handle next major milestones are being noted around 143.40 and 145.64.

EUR/JPY battling key resistance, eyes Eurozone inflation data

On downside, support can be noted at 139.79, 38.2% fib level, ahead of 138.43 which is 23.6% fib level. A break and daily close below 138.00 handle will be seen as very bearish hence exposing more downside movement towards 135.00.

Today at 10:00 GMT in London session, EurStat will release Eurozone’s Consumer Price Index (CPI) reports – a main gauge to assess inflation – for the month of January. According to median projection of different analysts, surveyed by Bloomberg, CPI ticked down by 0.4% in January as compared to 0.3% in a month before. Similarly, CPI declined to 0.7% last month compared with 0.8% in the same duration of a year before, according to the forecast. Generally speaking, a high reading close to 2% is seen positive for the economy and vice versa. So if we see worse than expected outcome, it will be bearish for EUR/JPY.

Later in the US session, a private institute Markit Economics is scheduled to release preliminary reading of US Services Purchasing Managers Index (PMI) for the month of February. A high reading might stir short-term bullish momentum in the US Dollar and vice versa. 

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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