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The EURJPY traded lower early Friday from a 6-year high at 140.000 as Euro seems to struggle to hold gains as ECB President Lagarde shrugs off hawkish sentiments on Thursday. The EURJPY bulls experienced a halt at 140.00 after a 7-week strong rally.
The ECB Kazak remarks on a possibility of a rate hike of 25bps as early as the July meeting may see the EURJPY trading higher as policy divergence between the ECB and BoJ widens.
The BoJ continues on their 4-day bond-buying and unless there is an intervention by the Japanese officials, the Japanese yen may continue to tumble.
Investors are standing on the side lines to review the presidential election results between Incumbent President Emmanuel Macron and Marie Le Pen. There is still optimism about the Euro strength as PMI Data were better than expected early Friday morning. Investors focus on ECB president Lagarde’s speech later in the New York session.
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The EURJPY breached a 4-year critical resistance at 137.00 making a fresh 6-year high as bulls target the 141.000 high. The outlook is strongly bullish above 137.00 previous broken resistance.
Bulls face a 141.00 barrier against further upside however a breach of that area may see the EURJPY surging higher towards 149.83, a 13-year high.
A failure to break above the 141.00 near-term high may cause the EURJPY to take a corrective pattern towards the 137.00 area and below. ECB monetary policy will be critical in the direction of the pair in the near term.
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The EURJPY traded lower after bulls failed to break above the 140.00 near-term high and the pair may take a corrective pattern in the near term. A Williams Alligator indicates that the EURJPY outlook is currently bullish as the price remains resilient above the 13, 5 and 8 moving averages. The moving average acts as dynamic support and resistance.
The RSI indicator shows that the pair is drawing closer to an overbought zone area where traders may expect to see sharp reversal price movements. There is still room for further upside gains however a break below 137.00 near-term support will reinforce a trend directional change as it may force bulls to cash in on the 7-week trend rally.
