FxWirePro: EUR/JPY extends bullish streak for the 4th consecutive session, breaks into daily cloud

EUR/JPY chart - Trading View 

Technical Analysis: Bias Bearish

- Price action has re-entered into the daily cloud

- Momentum is strongly bullish, Stochs and RSI are sharply higher

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

- GMMA indicator shows near-term trend has turned bullish

Data Watch:

According to the latest data reported by Germany’s Destatis on Monday, the country’s Retail Sales dropped by 5.1% MoM in July versus -0.9% expected and 4.2% last.

On an annualized basis, the German Retail Sales came in at -0.3% in July versus 3.7% expected and 6.2% reported in June.

Both German and EMU final Manufacturing PMIs came in a tad below the preliminary readings at 62.6 and 61.4, respectively, for the month of August. 

The Unemployment Rate in the broader Euroland ticked lower to 7.6% in July.

Support levels - 130.00 (converged 110 and 55 EMAs), 129.76 (5-DMA), 129.45 (21-EMA)

Resistance levels - 130.42 (Upper BB), 131.09 (20-week EMA), 131.17 (23.6% Fib)

Summary: EUR/JPY unfazed by mixed euro area data. The pair is extending gains for the 4th straight session.

The single currency garnered extra support from hawkish comments from ECB’s Knot and Holzmann on Tuesday, who advocated for a slower pace of bond purchases.

Break into daily cloud has reinforced bullish bias. Scope for test of 131 levels. Bullish invalidation likely on retrace below 21-EMA.