FxWirePro- EURJPY Trade Idea

The EUR/JPY pared most of its gains on board-based Yen buying. It hit an intraday low of 161.83 and is currently trading around 161.86. The intraday outlook is bearish as long as the resistance 164 holds.

The German Ifo Business Climate Index rose to 85.1 in January 2025 from 84.7 in December, surprising analysts who had expected no change. The Current Economic Assessment Index increased to 86.1, higher than the forecast of 85.4, while the Expectations Index fell slightly to 84.2 from 84.4. This increase indicates that German businesses are more optimistic about the current economic situation, though they remain cautious about the future, especially in the industrial and construction sectors. The services sector, however, showed stronger confidence. Overall, the data reflects a mixed but hopeful outlook for the German economy as it starts the new year.

Technical Analysis:

The EUR/JPY pair is trading below the 34,55 EMA and 200-4H EMA in the 4-hour chart.

• Near-Term Resistance: Around 162.25 a breakout here could lead to targets at 163/164/165/166.65/167.
   
• Immediate Support: At 160.95– if breached, the pair could fall to 159.70/158.80/157.76.
  
  Indicator Analysis (4-hour chart):
• CCI (50): Bearish
   
• Average Directional Movement Index: Bearish

Overall, the indicators suggest a weak trend.

Trading Recommendation:

It is good to sell on rallies around 162.75-80 with a stop loss at 163 for a TP of  160.