Wednesday, 23 May 2018

EUR/JPY At 9-month lows


EUR/JPY tumbled with around 300 pips this morning and marked 9-month lows. The single currency was set under huge pressure thanks to the political woes in Italy and the disappointing EZ PMIs prints collaborated for the acceleration of the bearish strength. On the other hand the Japanese Yen is staging strong on the back up of a new set of global risk-aversion trade, led by a sell-off across equity markets.
Technically speaking the short-term outlook remains bearish. On the four hour time frame the price has crossed to below its bearish moving averages. Stochastic is located within oversold territory and is showing strong bearish momentum. RSI has started to turn north although is slightly below its 30.
EUR/JPY bounced from the multi month low at 128.32 and currently is trading 128.60. However this recovery is not sustainable because around 128.50 the pair is quite vulnerable. Below this level bears might meet the key 128.00 psychological mark which if broken will bring weakness towards 127.50 area.  The upside remains unattractive despite the attempts for recovery and bulls should be more pushy in order to regain the 130.00 hurdle. 


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