EUR/JPY Price Forecast: Bulls eye 185.00 resistance area

The Euro (EUR) continues its upward trend for the third day in a row, trading higher against a weak Yen (JPY) due to disappointing Japanese GDP data. The EUR/JPY pair broke through the 50% retracement of the late July sell-off, hitting the 184.50 level, with the resistance area near 185.00 becoming more attainable. The Japanese Cabinet Office reported on Monday that the country's economic growth slowed to 0.3% in Q2, falling short of the 0.5% consensus and 2.0% growth anticipated by analysts.

BBH economists noted that private consumption remained flat, while private non-residential investment fell short, contributing to the soft growth pulse in Japan. EUR/JPY is presently at 184.54, firmly above an ascending trendline set by late July lows, with momentum indicators indicating increasing upside pressure. Bulls will likely face resistance between the 61.8% Fibonacci retracement of July's decline (184.82) and the July 31 high (185.17).

If broken, the next upside target will be the July 27-28 lows and the 78.2% Fibonacci retracement near 186.00. On the downside, support is found at the 200-day SMA and the 50% retracement of the decline, just below 184.00. Should this break, focus will shift to the Fibonacci cushions at 183.15, previously held by bears on August 12.