EUR/JPY downside playing out below 200 SMA
FXStreet (Guatemala) – EUR/JPY has run into supply just ahead of 137.20 resistance and has fallen back through the 20 and 50 SMA on the hourly charts.
EUR/JPY has succumb to strength in the Yen across the board while the 200 SMA has also been penetrated in USD/JPY at 120.09 and is weighing on the crosses. The Yen is strong below the 200 DMA at 120.80.
The week ahead is all about the FOMC but in the meantime, for the cross, the BoJ will also be under the spotlight. Analysts at Brown Brothers Harriman explained that there is only a slightly greater chance that the BOJ moves.
“Most who expect additional monetary stimulus see it coming next month rather than now. With deflationary forces not convincingly defeated, inflation far from the goal, and economic growth patchy, many think the BOJ has to step up its unorthodox monetary easing. If boosting the monetary base by JPY80 trln a year is not sufficient, will growing it by JPY90 trln really do the trick, as a member of parliament and an adviser to Abe suggested last week? ”
EUR/JPY levels on downside risks
Technically, the cross is trading with a bearish bias on the day and Karen Jones, chief analyst at Commerzbank explained that they continue to view the upside as limited, but loss of 134.80 will be needed to alleviate immediate upside pressure for a slide back to 133.10 and then to the 132.24/131.80 recent low and 61.8% retracement. “We target the 2013-2015 support line at 127.46 currently. Initial support will be the 131.80 then 129.28 Fibonacci retracements of the move seen this year.”
EUR/JPY has run into supply just ahead of 137.20 resistance and has fallen back through the 20 and 50 SMA on the hourly charts.
(Market News Provided by FXstreet)