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FxWirePro: EUR/JPY extends drag below 200-DMA, bias lower, stay short

  • EUR/JPY has broken below 200-DMA at 117.69 which is now major resistance on the upside.
     
  • With just two weeks to go for French election, the EUR remains under pressure.
     
  • Focus remains on the OAT-Bund yield spread ahead of the French elections.
     
  • Data wise we have Eurozone industrial production data and German Zew survey indices which may not have much influence.
     
  • IMM data for the week ended 04 April showed leveraged funds’ net short JPY positions continued to fall for the second consecutive week.
     
  • Technical studies are bearish, the single currency remains weak, after Draghi squashed rate rise hopes last week. 
     
  • Support levels - 117, 116.65 (50% Fib retrace of 109.20 to 124.09 rally), 116.25 (Nov 17 low and trendline)
     
  • Resistance levels - 117.69 (200-DMA), 118.40 (38.2% Fib retrace of 109.20 to 124.09 rally), 118.79 (Apr 5 high)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-JPY-hovers-around-200-DMA-good-to-go-short-on-close-below-11750-634780) is progressing well. 

Recommendation: Hold for targets.
 

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