FxWirePro: EUR/JPY consolidates above daily cloud and 110-EMA, upbeat German Factory data boosts euro

EUR/JPY chart - Trading View 

Spot Analysis:

EUR/JPY was trading 0.06% higher on the day at 130.36 at around 06:50 GMT

Previous Week's High/ Low: 130.74/ 129.48

Previous Session's High/ Low: 130.74/ 130.18

Fundamental Overview:

The shared currency remains bid in the anticipation that European Central Bank (ECB) might start talking about limiting the emergency bond-buying. 

ECB Vice President Luis de Guindos remained positive about the bloc’s economic recovery and paving the way for the eventual withdrawal of the stimulus package.

On the data front, German Factory Orders unexpectedly jumped in July, suggesting that the recovery in the manufacturing sector of Europe’s economic powerhouse is gaining momentum.

German Factory Orders jumped by 3.4% in July vs. -1% expected and 4.6% last, the latest data published by the Federal Statistics Office showed on Monday.

On an annualized basis, Germany’s Industrial Orders rose by 24.4% in the reported month vs. 26.5% previous and expected growth of 13.9%. The data outpaced expectations by a wide margin.

Technical Analysis:

- EUR/JPY is consolidating break into the daily cloud, bias bullish

- Momentum studies are bullish, Stochs and RSI are strongly bullish

- Volatility is high and rising as evidenced by widening Bollinger bands

- Price action has retraced brief dip below 200-DMA and GMMA indicators shows bullish shift

Major Support and Resistance Levels:

Support - 130 (converged 55 and 110 EMA), Resistance - 131.17 (23.6% Fib)

Summary: EUR/JPY poised for further gains. Scope for upside continuation as long as pair holds above 130 handle. Next major bull target lies at 23.6% Fib at 131.17.