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    IronFX Intraday Comment | EUR/JPY | 26/11/2015

    • The dollar traded mixed against its G10 peers during the European morning Thursday, in a relatively quiet day as Thanksgiving holiday is likely to keep volumes low. The dollar was higher against GBP, NZD, CHF and AUD, in that order, while it was slightly lower vs NOK. The greenback was unchanged against EUR, JPY, CAD and SEK.

    • Eurozone’s M3 money supply rose 5.3% yoy in October from 4.9% yoy previously, above expectations of 4.9% yoy. What was more important however, was the increase in the flow of credit to the private sector. Growth in lending to non-financial corporations accelerated to 0.6% yoy from 0.1% yoy in September, while lending growth to households ticked up to 1.2% from 1.1%. Even though the data suggest that the ECB’s stimulus programs are supporting somewhat the bloc’s recovery, it is not enough to offset expectations for further measures next week. Market participants remain positioned for further easing from the ECB, which weigh on EUR and keeps it under selling interest.

    • EUR/JPY traded lower during the European morning Wednesday after it hit resistance near the 130.40 (R1) resistance zone. Currently, the pair looks to be headed towards the 129.85 (S1) support zone, where a decisive dip is possible to open the way for our next support obstacle at 129.35 (S2). As long as the pair is trading within the downside channel that has been containing the price action since the 9th of November, I would consider the short-term outlook to be negative. My view for further declines is also supported by our short-term momentum studies. The RSI turned down again and could be headed for another test near its 70 line, while the MACD, already negative, shows signs that it could top and cross below its trigger line. As for the broader trend, on the 22nd of October, the rate fell below the upside support line taken from the low of the 14th of April. This has turned the medium-term outlook negative as well and corroborates my view that EUR/JPY is likely to continue trading lower in the foreseeable future.
    • Support: 129.85 (S1), 129.35 (S2), 128.90 (S3)

    • Resistance: 130.40 (R1), 130.75 (R2), 131.10 (R3)

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