EUR/JPY rejected at 5-DMA, heads towards 50-DMA?

FXStreet (Mumbai) – The EUR/JPY cross reversed gains and fell back into the negative territory, extending weakness into a third-day this Monday.

EUR/JPY unable to extend gains beyond 133 handle

Currently, the EUR/JPY pair trades -0.29% at fresh session lows of 132.59, heading for a retest of 132.50 levels, where the 50-DMA intersects. The renewed selling witnessed in the EUR/JPY can be attributed to the sudden strength seen in the yen against its American rival. USD/JPY corrects lower and now tests 121 handle.

On the other hand, heavy losses in the EUR/USD pair also collaborates to the downside in EUR/JPY while the US dollar continues to trade firmer against its major competitors on the back of rising US treasury yields.

Looking ahead, expectations of a Fed rate rise this week is likely to keep the greenback underpinned, which could in turn keep the EUR/JPY cross confined below 133 handle.

EUR/JPY Technical Levels

To the upside, the next resistance lies at 133.04/10 (5-DMA/ daily high), above which it could extend gains to 133.50 (10-DMA). To the downside, the cross finds immediate support at 132.52 (50-DMA), below that 131.95 (20-DMA), could act as a major support.

The EUR/JPY cross reversed gains and fell back into the negative territory, extending weakness into a third-day this Monday.


(Market News Provided by FXstreet)