EUR/JPY: outlook has worsened
Trade ideas
SELL 123.00; TP 122.20; SL 123.20
SELL 124.20; TP 123.00; SL 124.55
It looks like the euro is vulnerable to further declines versus the Japanese yen. Yesterday, the European Commission cut the euro zone’s GDP growth forecast for 2019 to 1.2% from 1.3% predicted in February. The reading is well below the 1.9% growth seen in 2018. This hurt EUR/JPY. Today, the ECB will release the accounts of its last meeting, and the risks for the euro are once again negative. In addition, the yen is gaining strength as a safe haven asset amid the problems in the US-Sino trade talks.
EUR/JPY was supported at 123.10 on Tuesday (50% of the advance since January). The decline below this level will open the way down to 122.15. On the other hand, it’s necessary to mention that the pair has already made a significant move down this week, so it can make an attempt to correct to 124.00. Selling pressure will reappear at this point. To return to power bulls need to push the price above the weekly pivot point at 124.65.
