The Euro facing a downtrend against the Japanese Yen due to political uncertainty in France has caused the EUR/JPY to trade at 168.43, marking the second consecutive day of losses. The recent drop has been triggered by France’s presidential approval ratings hitting a five-year low ahead of the General Elections.
In terms of technical analysis, the EUR/JPY has been consolidating below the key level of 170.00, while still remaining above the Ichimoku Cloud (Kumo). The Relative Strength Index (RSI) shows that sellers are gaining momentum, with the indicator falling below the 50-line. This suggests that further losses could be on the horizon for the EUR/JPY pair.
If the EUR/JPY drops below the 50-day moving average (DMA) at 167.47, it could lead to a decline into the Kumo, indicating a potential acceleration of the downtrend. Key support levels to watch for include the bottom of the Kumo at 165.92 and the 100-DMA at 164.78. A breach of these support levels could signal a further downward movement for the EUR/JPY pair.
Overall, the political uncertainty in France has impacted the Euro’s performance against the Japanese Yen, leading to a downtrend in the EUR/JPY pair. Traders are advised to closely monitor key technical levels, such as the 50-DMA and support levels at 165.92 and 164.78, to gauge the potential direction of the pair in the coming days. The RSI indicator also suggests that sellers are gaining control, indicating a bearish sentiment for the EUR/JPY in the short term.