Let's take a look at the price movement on the chart of the EUR/JPY currency pair which has managed to reach a 3 -month high and which is one of the favorites of these investors.
The Euro currency has managed to show an outstanding strengthening against the Yen in last week’s trading driven by market reaction to the positive statement of European Central Bank (ECB) President Christine Lagarde at a policy meeting.
This has given hope to Euro investors again after the horizontal movement of prices throughout the end of January.
While the Yen retreated from its previous strengthening it failed to be driven by mixed market sentiment.
The price surge on the EUR/JPY chart last week saw the price reach a high of 132.00 over the weekend, but the price that started trading earlier this week immediately slipped back from the zone.
The decline only tested the support level around 131.400 before the price flattened above that level until Tuesday's trading yesterday.
Continuing on today's trading, the price still failed to make a rise past the resistance of 132.00 and displayed a decline in the European session.
The following horizontal movement of the price begs the question of where is the next price direction?
Reports that Lagarde eased speculation that policy tightening would put further pressure on the Euro.
Thus, prices could plunge back lower if the Euro is traded weak in the market.
The decline that managed to pass the support level at the beginning of the week is likely to decline lower with the next target level being at the support zone of 128,300.
On the other hand if the price manages to accelerate higher to continue last week’s price increase, the 132.00 resistance will be tested again.
Exceeding that level will push the price towards the level of around 133,500 to record the latest 4 -month high.
