FXStreet (Bali) - After being knocked lower breaking the key 131.45/50 daily support, EUR/JPY found a fresh 7-month low at 131.63 before a strong recovery during early Tokyo, now retesting the support-turned-resistance at mentioned 131.45/50.
EUR/JPY in danger of further selling
Should the risk-off sentiment worsen following the Paris attacks by ISIS, which has been followed by an immediate retaliation on ISIS targets in Syria by France, then EUR/JPY is one of the most vulnerable pairs to resume the downside.
Note, while both currencies are now seen as funding vehicles given ultra-low interest rates in both Europe and Japan, which makes them the most attractive during risk-averse conditions, the multi terrorist attacks in Paris are perceived as the ECB having no other option than extending QE and likely cut rates further, as the fluid situation is likely to impact consumer confidence, GDP growth and inflation expectations across Europe.
EUR/JPY technicals
On a daily basis, according to Valeria Bednarik, Chief Analyst at FXStreet, "the technical picture favors the downside, given that the price is far below its 100 and 200 SMAs, whilst the Momentum indicators is unable to advance beyond its 100 level and the RSI indicator turned lower around 35."
"In the 4 hours chart, the pair has met selling interest on approaches to a strongly bearish 100 SMA, currently at 132.60, whilst the technical indicators stand below their mid-lines, albeit lacking direction strength at the time being", Valeria adds.
For more information, read our latest forex news.
No comments:
Post a Comment