FxWirePro- EURJPY Trade Idea

EUR/JPY showed a minor sell-off on the strong yen. At the time of writing, it hit a low of 163.10 and is now trading around 163.32. The intraday outlook is bearish as long as the resistance of 165.10 holds.

In November, the Eurozone's inflation rate was reported at 2.0% year-on-year, slightly higher but still within the European Central Bank's target range. In Germany, the ZEW Economic Sentiment Index dropped sharply to 7.4, showing growing pessimism among investors due to political instability and external factors. The current situation index also fell significantly to -91.4, highlighting concerns about the economic environment. Despite a surprising 0.2% GDP growth in Q3 2024, challenges in demand and investment remain. The unemployment rate stayed at 6.1%, raising worries about Germany's economic outlook.

Technical Analysis

The pair is currently below the 34- and 55 EMA, as well as the 365 Hull moving average on the 4-hour chart.

Near-Term Resistance: Around 164.  A breakout here could lead to targets of  165/165.35/166/166.69.

Immediate Support: At 163. If this level is breached, the pair could drop to  161.80/161.20, 160.65, 160, 159, or 158.35.

Indicator Analysis (4-hour chart)

• CCI (50): Bearish
• Average Directional Movement Index: Bearish

Overall, indicators suggest a bearish trend.

Trading Recommendation

Consider selling on rallies around 162.78-80, with a stop loss at 163.80, aiming for take profit levels at 160.10.