QE is still an option on the table for the ECB EUR JPY

Daily Chart EUR/JPY

The pair has been in a downtrend since early-May 2014. We have identified R1 to be a relatively strong ceiling for the pair. It has been tested once as a resistance level, the pair has failed to break this level. In addition, it is supported by the 200-day MA (orange) and 50-day MA (magenta) crossover. R2 is as strong ceiling for the pair, it has been tested twice and the pair has failed to break it.

S1 is a relatively weak support level, as the pair has not tested this level as a support. During its time as a resistance level, it has been tested once. Thus, it remains a relatively weak level. S2 is a strong floor for the pair, the pair has tested this level twice and the pair has failed to break it.

Technicals: RSI (Relative Strength Index) and MAs (Moving Averages)

· 200-day MA (orange) is above the 50-day MA (pink) due to the recent cross over, signalling a bearish stance for the pair. 200-day MA has flattened signalling a loss of momentum. In addition, 200-day MA will provide additional resistance to the pair.

· RSI has not been in overbought/oversold region during this downtrend. This signals that the pair is trending, in our case downwards.

In the short term, the pair is neutral. The lack of Japanese data and highly probable mixed data from the Euro Bloc may mean that the pair consolidates into a sideways market. Haruhiko Kuroda and Mario Draghi (President of the ECB) will try to keep investors optimistic. Haruhiko Kuroda will need to make a greater effort of winning investors over due to a lack of Japanese data.

Ajay Pankhania
Technical Analyst
Accendo Markets

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