EUR/JPY Forecast — Euro In Downtrend Below 134.00 Vs Japanese Yen

• - The Euro is following a downtrend and is currently trading below 134.00 against the Japanese Yen.
• - There is a declining channel forming with resistance at 133.10 on the hourly chart of EUR/JPY.
• - Today in Japan, the Machinery New Orders report for Dec 2017 was released by the Cabinet Office.
• - The outcome was below the forecast of +2.2% as there was a decline in order by 5% (YoY).

Japan’s Machinery New Orders

Today in Japan, the Machinery New Orders report for Dec 2017 was released by the Cabinet Office. The market was looking for a 2.2% rise in orders in Dec 2017 compared with the same month a year ago.

However, the actual result was below the forecast of +2.2% as there was a decline in order by 5% (YoY). It was well below the last increase of 4.1%. Moreover, the monthly change posted a decline of 11.9%, whereas the market was looking for -2.3%. This was a lot worse compared with the last increase of 5.7%.

The EUR/JPY pair may correct a few pips in the short term, but it remains in a downtrend below the 133.40 resistance.

EUR/JPY Technical Analysis

The Euro started a downside move from well above 134.50 and declined by more than 100 pips recently against the Japanese Yen. The EUR/JPY pair faced a lot of selling pressure and moved below the 134.00 and 133.80 support levels.

The pair is now trading below the 133.50 level and the 100 hourly simple moving average. It traded as low as 131.59 and recovered recently. However, the upside move was capped by 133.30 and the 100 hourly simple moving average.

Moreover, there is a declining channel forming with resistance at 133.10 on the hourly chart. On the downside, an initial support is around the 50% Fib retracement level of the last wave from the 131.59 low to 133.38 high.

There are chances of a couple of swing moves in EUR/JPY around 133.00 in the near term. Once there is a close above the 133.50 resistance and the 100 hourly SMA, the pair could gain upside momentum.

Originally published at — ForexGator.com.