EUR/JPY: risk appetite improves and fundamentals shun the Yen

EUR/JPY is up through the 200 sma on the 1hr chart at 112.97 and onto the 113 handle as market's appetite for risk starts to improve at the start of the week.

However, the Japanese yen plummeted against all of its major rivals, following news that Abe not only won elections, as noted by Valeria Bednarik, chief analyst at FXStreet, but also asked his cabinet to prepare a new stimulus package. "Further weighing on the JPY was Japan machine orders for May that came in lower for the second month in row at -1.4% after plummeting in April when it fell by 11%, a sign that business investment has been decreasing sharply."

 EUR/JPY levels

Short term, the pair is extremely overbought, according to Valeria Bednarik, who explained that in the 1 hour chart however, the RSI indicator keeps heading north around 84, with no signs of upward exhaustion at the time being. 

"In the same chart, the price has overcome its 100 and 200 SMAs, with the largest now around 112.95, offering a strong short term support. In the 4 hours chart, technical indicators also maintain their bullish slopes within positive territory, supporting a bullish continuation for the upcoming sessions. The post-Brexit high stands at 114.79, the level to beat to confirm a steeper recovery during the next few days."