EUR/JPY Price Analysis: JPY holds resilient despite weak local and Chinese data

• EUR/JPY trades with gains near 157.00 but failed to hold the momentum that took it to a high near 158.00.
• Japan reported soft economic data, which outpaced the rise in Labour Cash Earnings in July.
• Weak Chinese data limits the JPY’s upside potential.

On Tuesday, the EUR/JPY jumped near 158.00 and then reversed its course settling near 157.00 as bulls started to show some exhaustion. No data was released in Europe besides the Harmonized Index of Consumer Prices (HICP) from the July revision, which didn’t show any surprises, while Japan reported signs of a weakening economy.

Despite Labour Cash Earning rising by 2.3% YoY in June, Overall Household Spending and Bank Lending came lower than expected and showed signs of a weaker Japanese economy. Plus, China reporting invalid data isn’t good news for Japan. In its leading trading partner, Exports decreased by 14.5% in July, and Imports fell by 6.9%, showing higher declines than anticipated.

On the European side, the EUR traded mixed against its rivals on an empty European calendar session.

EUR/JPY Levels to watch

The technical analysis of the daily chart points to a neutral to a bearish outlook for EUR/JPY, indicating a decline in bullish strength. The Relative Strength Index (RSI) turned flat in positive territory, while the Moving Average Convergence (MACD) displays stagnant red bars. That being said, the pair is above the 20,100,200-day SMAs, indicating a favourable position for the bulls in the bigger picture.

Support levels: 156.00, 155.55, 155.00.

Resistance levels: 157.50, 158.00, 158.50.

EURJ/JPY Daily chart