The single currency posted another decline on Friday and the EURJPY cross was seen 0.65% lower during the London session, trading around 128.65.
German data unexpectedly weakened again and industrial production for April slowed notably to 2.0% year-on-year, down from 3.2% in the previous month. The monthly change cratered from 1.0% to -1.0%.
Yesterday, German factory orders for May worsened also, when the monthly change fell from -0.9% to -2.5% and the year-on-year basis dropped from 2.9% to -0.1%.
The EURJPY cross failed to stay above the psychological level of 130 and yesterday’s daily candle looks a bearish pin bar. Today’s sell-off brought the euro back below the 129 mark.
The next support is at 128.00 and If not held, further decline to 127.50 could occur, where larger bids could be concentrated. As long as the cross trades below 129.50, which is the first important resistance, and above 127.50, the short-term outlook seems neutral.
The price needs to either jump above, or break below these levels to set the direction for next days. There are no major news on the agenda today and therefore the current bearish bias can persist throughout the day. In all cases we strongly recommend to have rigorous money and risk management.
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