Foreign exchange Watchlist: Will EUR/JPY’s Downtrend Break?

Manufacturing and providers PMIs from the euro area are due at present!

Whereas others have their eyes on financial information releases, different merchants are pricing in geopolitical tensions between Russia and Ukraine.

Will at present’s occasions lengthen or break EUR/JPY’s downtrend?

EUR/JPY 1-hour Forex Chart

EUR/JPY 1-hour Foreign exchange Chart

Fundamentals & Catalysts

Later at present we’ll see manufacturing and providers PMI studies from Germany, France, and the Eurozone. Markets expect February’s numbers to indicate enhancements because the impression of the Omicron variant fades from January.

In fact, any beneficial properties could also be capped by geopolitical considerations in Ukraine. U.S. Secretary of State Antony Blinken and Russian Overseas Minister Sergey Lavrov will meet on Thursday whereas Presidents Putin and Biden have agreed “in precept” on a summit to debate de-escalation “if an invasion hasn’t occurred” by then.

Judging by the rise in Russian troops alongside Ukraine’s borders, although, Thursday’s conferences might not push via.

Additional escalation in geopolitical tensions might lengthen EUR/JPY’s downtrend because the frequent forex is bought whereas merchants purchase the safe-haven yen.

Value Motion

EUR/JPY has been on a downtrend since two weeks in the past however there have been sufficient bulls on the 130.00 space to forestall additional losses.

Immediately, EUR/JPY is testing a pattern line resistance whereas Stochastic hints of a bearish divergence on the 1-hour chart. It additionally doesn’t assist the euro that the 100 SMA has crossed over the 200 SMA, one thing that has led to sustained directional developments the final 3 times that it occurred on the chart.

Bears who’re betting on the euro taking hits from Ukraine’s tensions can begin scaling in at present ranges and purpose for final week’s lows. You may even purpose for February’s lows if there’s sufficient momentum.

If we don’t see escalations in geopolitical tensions at present, or if merchants give attention to stronger PMIs from the euro area, then EUR/JPY might break above its pattern line resistance and head for final week’s highs close to the 200 SMA earlier than the sellers step in.

When you’re undecided about shorting the euro in opposition to the yen, then you may as well look ahead to catalysts or momentum earlier than you enter your trades.

Whichever route you select to commerce, be sure obtained your capital coated with cease losses and a stable buying and selling plan!

This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market entails threat. Please learn our Risk Disclosure to be sure you perceive the dangers concerned.

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