EUR/JPY follows trend lower ahead of ECB
James Chen, CMT October 19, 2016 7:50 PM
EUR/JPY’s drop on Wednesday was not only due to ECB-driven pressure on the euro, but also by a surge in the safe-haven Japanese yen, which regained some strength amid financial markets that remain buoyant but have become increasingly wary ahead of major upcoming risk events.
For the past two weeks, EUR/JPY has retreated sharply from a key descending trend line extending back to the late January highs. This drop corresponds with the long-term trend for the currency pair, although the past few months since June’s Brexit-driven plunge to multi-year lows has essentially seen a sideways trading range.
As key risk events on the horizon, including Thursday’s ECB statement and conference, continue to impact both the euro and yen, the currency pair could quickly find further reason to extend its long-prevailing downtrend. With any further retreat from the noted downtrend resistance line, the next major bearish target is at the 112.00 support level, followed further to the downside by the 111.00 support level.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.