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15 May 2014
EUR/JPY: Tech, macro picture favour sellers
FXStreet (Bali) - EUR/JPY's one-way traffic was prolonged during Wednesday's trading, with a European breakout of 140.00 leading to an extension of Tuesday's sell-off all the way down to 139.45, hitting a 9-week low.
After months of directionless bias, the latest macro developments, together with fresh technicals clues, is making the EUR/JPY a serious contender to suffer further setbacks. Firstly, there seems to be a serious deviation in policy intentions between the BoJ and the ECB, with the former so far failing to telegraph to the market further easing (see latest report by Nomura), while the latter appears on course to adopt negative rates at its next meeting. Secondly, the resolution of a long-held triangle to the downside, coupled with a break of the important 140.00 round number, is adding to the bearish case.
Short term EUR/JPY technicals
Valeria Bednarik, Chief Analyst at FXStreet.com, notes: "The hourly chart shows indicators with a clear bearish momentum, while moving averages extended to the downside above current price, all of which supports more slides. In the 4 hours chart technical readings also present a pretty bearish tone, eyeing now key 138.80 area for this Thursday."
After months of directionless bias, the latest macro developments, together with fresh technicals clues, is making the EUR/JPY a serious contender to suffer further setbacks. Firstly, there seems to be a serious deviation in policy intentions between the BoJ and the ECB, with the former so far failing to telegraph to the market further easing (see latest report by Nomura), while the latter appears on course to adopt negative rates at its next meeting. Secondly, the resolution of a long-held triangle to the downside, coupled with a break of the important 140.00 round number, is adding to the bearish case.
Short term EUR/JPY technicals
Valeria Bednarik, Chief Analyst at FXStreet.com, notes: "The hourly chart shows indicators with a clear bearish momentum, while moving averages extended to the downside above current price, all of which supports more slides. In the 4 hours chart technical readings also present a pretty bearish tone, eyeing now key 138.80 area for this Thursday."