FX.co ★ Fundamental Analysis of EUR/JPY for May 23, 2018

EUR/JPY has been quite impulsive with the bearish gains recently inside the corrective range between the 129.50 to 132.00 area. Despite the worse economic reports today, certain gain on the JPY side does indicate the weakness of EUR in the process ahead of the ECB Monetary Policy Meeting Accounts tomorrow.

Today, JPY Flash Manufacturing PMI report was published with a decrease to 52.5 from the previous figure of 53.8 which was expected to be at 53.6 and All Industry Activity report was also published with a decrease to 0.0% from the previous value of 0.4% which was expected to be at 0.1%.

On the EUR side, today French Flash Manufacturing PMI report increased to 55.1 from the previous figure of 53.8, French Flash Services PMI decreased to 54.3 from the previous figure of 57.4, German Flash Manufacturing PMI decreased to 56.8 from the previous figure of 58.1, and German Flash Services PMI decreased to 52.1 from the previous figure of 53.0. Moreover, today EUR Flash Manufacturing PMI decreased to 55.5 from the previous figure of 56.2 and Flash Services PMI decreased to 53.9 which was expected to be unchanged at 54.7.

As of the current scenario, EUR economic reports have mostly negative results today, whereas JPY has already been gaining. Until EUR comes up with better economic development outcomes and better monetary policies tomorrow at ECB Monetary Policy Meeting Accounts, JPY is expected to dominate EUR further.

Now let us look at the technical view. The price is currently residing below 129.50 with recent bearish impulsive pressure which is expected to continue further in the coming days. Though the bearish pressure is still quite strong which might lead to continuation of the pressure, but certain pullback towards 129.50 is expected before the price continues to move lower towards the 128.00 support area in the coming days. As the price remains below 132.00, the bearish bias is expected to continue.