The EUR/JPY has increased sharply today and is very close to take out an important dynamic resistance, the rate has jumped above this level, but we need a confirmation that the rate will have enough energy to increase further. We still need a confirmation because the rate continues to move sideways on the short term, the Yen continues to decrease versus the other major currencies even if the Japanese economic data have come in better today, on the other hand, the Euro-zone data have come in mixed, but have boosted the Euro, which is increasing versus all its counterparts.
The Japanese Household Spending has decreased by 2.1%, less than the 2.6% estimate, has come better, but unfortunately the indicator remains deep in the negative territory in the last 7-months, while the National Core CPI has decreased by 0.5%, matching expectations, the indicator has remained steady at -0.5% for the fourth month in September. The Yen wasn’t impressed by the Unemployment Rate decrease, the rate has fallen from 3.1% to 3.0% again after one month increase, the indicator has produced a big surprise because the estimate was 3.1%. Moreover the Tokyo Core CPI has decreased by 0.4% in October, have come better versus the -0.5% estimate, while the BOJ Core CPI has increased by 0.2%, less than the 0.3% forecast.
The Euro has increased today, despite the mixed economic data, the Spanish Flash CPI has increased by 0.7% in October, exceeding the 0.3% estimate, while the Spanish Flash GDP has increased by 0.7%, matching expectations. The EUR has appreciated and has ignored the French Prelim CPI, which has increased by 0.0%, while the currency traders have expected to see a 0.2% growth, the Frech Consumer Spending has disappointed as well, has dropped by 0.2%, even if the economists have forecasted a 0.3% growth, moreover the French Prelim GDP rose by 0.2%, has come below the 0.3% estimate. The Destatis is expected to release the German Prelim CPI, which could remain steady at 0.1% for the second month in October.


The rate has resumed the last day’s bullish movement and now is challenging the median line (ML) of the major descending pitchfork, has climbed above this level, but has retreated a little in the last two hours, remains to see if we’ll have a valid breakout or this will be a false breakout and the rate will drop again. The rate has failed to hit the 61.8% retracement level, the rate continues to move sideways on the short term, the behavior has changed on the short term, but the sentiment remains intact as long as the rate continues to stay below the median line (ML). We’ll have a larger rebound only if the price will break and will stabilize above the ML and above the 61.8% retracement level.


I’ve drawn a minor ascending pitchfork on the H4 chart to understand better the price action, the perspective is bullish on this chart as long as the rate is trading inside the ascending pitchfork’s body.

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