This week, the pair EUR/JPY has grown significantly, reaching the highs since the beginning of March. Weakening in the Yen is associated with the negative macro-economic statistics. After the release of negative data on the industrial output in Japan, the price sharply went up. In March this index fell by 0.3%, which happened for the second time in a row. Negative impact on the Yen was also caused by the fact that the Bank of Japan has revised GDP growth forecast. According to the Bank, Japanese GDP will amount to 2.0% this year against the previously expected 2.1%. In 2016 economic growth in Japan can increase by 1.5% instead of 1.6% as expected earlier.
Today, investors are waiting for the information on preliminary consumer price index in Eurozone. It is expected that this index will amount to 0.0%, which it better than the previous results, and can have a positive impact on Euro.
Support and resistance
Technically, the price has broken down the upper line of Bollinger bands, which gives a chance of the correction to 132.20 and 131.35. However, in general, uptrend will continue and after the completion of the correction the price can return to two-month highs.
Technical indicators show that upward movement will continue. MACD histogram is in the positive zone; its volumes are increasing. Stochastic lines are ready to turn upwards.
Support levels: 132.20, 131.35 and 130.40.
Resistance levels: 133.50, 134.70 and 135.80.
In the current situation it makes sense to open short-term short positions at the current price with the target of 132.30. Pending buy orders are advisable at the level of 132.30 with the targets of 133.50 and 134.70.