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7 Oct 2013
EUR/JPY falls sharply on “no progress at all” on US issues
FXstreet.com (Athens) – The EUR/JPY is heading downwards since the kick-off of the Asian trading session on Sunday mainly due to the risk-off sentiment, inspired by falling Nikkei and in “no progress at all” on the US debt-ceiling issue during the weekend.
US Boehner says “no progress at all”, Nikkei down 1.07%; EUR/JPY tumbles
The EUR/JPY has started the week trading session on the “down” side, since the risk sentiment has hit the “off” button. Being more précised, US House Speaker Boehner suggested that “there was no progress at all on the US government shutdown as well as on the debt ceiling issues during the weekend”, boosting the demand for safe-haven assets and currencies again. What’s more the Nikkei is trading down 1.07%, i.e. pushing further the cross as the JPY strengthens more. Traders should bear in mind that as long as US budget negotiations continue to stall amidst shutdown, the absolute safe haven currency, the Japanese yen might continue to outperform. Last but not least, Prime Minister Abe speaking at APEC mentioned that Japan ”must make certain deflation is swept away.”
Technical Outlook on EUR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend. The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”
Our personal aspect of view is that as long as the Nikkei is falling and we are amidst of US political “jitters”, we should pay attention to the crucial support key points. The first support zone lies at the area as of the 131.70-131.80 (Friday’s low was 131.77, at the time being is trading at 131.77), whilst the more seeming strong support area lies at 131.35-131.40 where a double bottom has been created. Finally investors should always bear in mind the heavily strong negative (inverse) correlation between the Nikkei index and the Japanese currency (-0.65% approximately on the past 20days studies).
US Boehner says “no progress at all”, Nikkei down 1.07%; EUR/JPY tumbles
The EUR/JPY has started the week trading session on the “down” side, since the risk sentiment has hit the “off” button. Being more précised, US House Speaker Boehner suggested that “there was no progress at all on the US government shutdown as well as on the debt ceiling issues during the weekend”, boosting the demand for safe-haven assets and currencies again. What’s more the Nikkei is trading down 1.07%, i.e. pushing further the cross as the JPY strengthens more. Traders should bear in mind that as long as US budget negotiations continue to stall amidst shutdown, the absolute safe haven currency, the Japanese yen might continue to outperform. Last but not least, Prime Minister Abe speaking at APEC mentioned that Japan ”must make certain deflation is swept away.”
Technical Outlook on EUR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend. The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”
Our personal aspect of view is that as long as the Nikkei is falling and we are amidst of US political “jitters”, we should pay attention to the crucial support key points. The first support zone lies at the area as of the 131.70-131.80 (Friday’s low was 131.77, at the time being is trading at 131.77), whilst the more seeming strong support area lies at 131.35-131.40 where a double bottom has been created. Finally investors should always bear in mind the heavily strong negative (inverse) correlation between the Nikkei index and the Japanese currency (-0.65% approximately on the past 20days studies).