29 Oct 2013
EUR/JPY tumbles after failing to capture 135.00 handle on Monday
FXstreet.com (Athens) – The EUR/JPY has been trading south on Tuesday – apart from the last hour – amidst a risk-off sentiment inspired by looming FOMC, remerging Chinese jitters and a discouraging statement on behalf of RBA’S Governor Stevens.
EUR/JPY setbacks plausibly in a risk-averted environment ahead of FOMC
The EUR/JPY is trading higher the last hour, despite that it was heading lower since the early start of the Asian opening session. Market participants could attribute cross downtrend shift to more than couple of reasons; first of all, from the very early start – actually overnight - RBA’s Stevens made his best efforts to disseminate risk off mood across the board, therefore driving the Japanese Yen higher on the back of safe-haven demand. What’s more, while the PBOC injected CNY13 billion into the markets after two weeks ‘break’ in liquidity provision, still the benchmark 7-day SHIBOR rate went the upper level to a new month high of 4.497%, thus the Chinese liquidity fears came again in the backdrop. Mostly, the risk aversion might be attributed to the fact that traders feel very hesitant to open new positions ahead not only tomorrow’s FOMC, but also next week’s ECB’s meeting and NFP release. Finally, it is noteworthy to point out that the EUR/JPY has found solid support today on its 200-hourly SMA (134.29).
Technical Perspective on EUR/JPY
Karen Jones Head Technical Analyst of Commerzbank, mentions that the “EUR/JPY EUR/JPY no change - last week the market rallied to and held the initial test of the very long term retracement at 135.33 (23.6%retracement of the move down from the 1979 high). We note in addition the TD perfected set up on the daily chart. The May high at 133.83 has seen some erosion and we would allow for some slippage to key support, which remains the 55 day ma and 4 month uptrend at 132.35/132.01. Beyond this the market remains capable of gains to 136.71, the target from the triangle, which broke up from the end of last year, which we suspect will hold the topside. Beyond here, the June 2009 high at 139.26.”
EUR/JPY setbacks plausibly in a risk-averted environment ahead of FOMC
The EUR/JPY is trading higher the last hour, despite that it was heading lower since the early start of the Asian opening session. Market participants could attribute cross downtrend shift to more than couple of reasons; first of all, from the very early start – actually overnight - RBA’s Stevens made his best efforts to disseminate risk off mood across the board, therefore driving the Japanese Yen higher on the back of safe-haven demand. What’s more, while the PBOC injected CNY13 billion into the markets after two weeks ‘break’ in liquidity provision, still the benchmark 7-day SHIBOR rate went the upper level to a new month high of 4.497%, thus the Chinese liquidity fears came again in the backdrop. Mostly, the risk aversion might be attributed to the fact that traders feel very hesitant to open new positions ahead not only tomorrow’s FOMC, but also next week’s ECB’s meeting and NFP release. Finally, it is noteworthy to point out that the EUR/JPY has found solid support today on its 200-hourly SMA (134.29).
Technical Perspective on EUR/JPY
Karen Jones Head Technical Analyst of Commerzbank, mentions that the “EUR/JPY EUR/JPY no change - last week the market rallied to and held the initial test of the very long term retracement at 135.33 (23.6%retracement of the move down from the 1979 high). We note in addition the TD perfected set up on the daily chart. The May high at 133.83 has seen some erosion and we would allow for some slippage to key support, which remains the 55 day ma and 4 month uptrend at 132.35/132.01. Beyond this the market remains capable of gains to 136.71, the target from the triangle, which broke up from the end of last year, which we suspect will hold the topside. Beyond here, the June 2009 high at 139.26.”