EURJPY Analysis -Euro Weaker vs Yen On Debt Uncertainty & Haven Flows - Approaching 100.00
- So called “safe haven” flows have continued in recent trading, as the dollar and yen experienced strength versus their major currency counterparts during early trading today (November 13th). Concerns around Europe have dominated risk sentiment as Greece is firmly back in focus with the IMF and EU creditors in prolonged discussions over Greek debt targets.
- On the back of this, the EURJPY has printed a fresh 1-month low and is threatening the 100 psychological round number level area after seeing sustained downside under the 38.2% Fibonacci retrace level (see figure 1). EUR/JPY is trading down -0.34% on the day. We note that the area between 99.50 and 100.00 acted as support during September and October and is now a key focus for this pair.
- These significant round number levels, or a “price zone” around them, often act as support and resistance in their own right, as order flow builds.
- The corrective risk is for a bounce near this key area. Any upside would need to deal with the price pivot level around 101.50, which is aligned with the 50 period daily SMA, with the 200 period SMA close above and aligned with prior support lows from earlier this month.
- This all comes in the context of the late October bounce from 105.00 area resistance highs, just under the Fibonacci confluence of 38.2 and 61.8% retrace levels.
- There was also a break below the ascending trend line on the 7/11/12 (with a bearish engulfing candle confirmation) as highlighted on the figure 2 chart below. Risk trends continue to dictate the price action in the near term as the EUR/USD trades down -0.34% (a two-month low) and the dollar index prints fresh 1-month highs at 81.23. The yen has outperformed the dollar since rebounding from the key 80.60 area resistance at the start of November.
EURJPY Daily Chart Figure 1
EURJPY Daily Chart Figure 2