11 Nov 2013
EUR/JPY loses momentum in late Asian trading session
FXstreet.com (Athens) – The EUR/JPY is heading downwards the last couple of hours capped by the Friday’s high of 132.49 as well by the 50-hourly EMA (132.77).
EUR/JPY pays little attention to the surging Nikkei; seems that potential further easing on behalf of ECB makes traders more hesitant
The EUR/JPY after a surging Friday’s session, where the cross posted sharp gains post NFP data, managed to touch a high of 132.57 on Asian trading session. Traders might have attributed the constant uptrend shift of the cross to the Nikkei major gains (+1.13%), alongside with the USD/JPY uptrend behavior. What’s more, there was a lot of short-covering that might assisted the cross to move a little higher, but the momentum bias is still bearish. The cross did not manage to sustain its gains as ECB’s Coeure comments on weekend are good reminders of the ECB’s new monetary policy stance for further easing, thus the single currency is still very vulnerable. Regarding the data news, the Japanese trade balance release at slightly better levels but market participants should probably pay much more attention to the upcoming to the Japanese Eco Watchers Survey.
Technical Outlook on the EUR/JPY
The EUR/JPY’s first crucial support area resides at the 131.44 (Ichimoku base cloud) - 131.55 (100-daily SMA), but if this area is decently breached, the pair could move further downwards near its 200-daily SMA (129.23). Karen Jones Head Technical Analyst of Commerzbank mentions that “EUR/JPY …… We regard the pattern on the market as a potential rising wedge (reversal pattern) and a weekly close below the 132.01 level should be enough to complete the pattern and introduce scope to 122.80.”
EUR/JPY pays little attention to the surging Nikkei; seems that potential further easing on behalf of ECB makes traders more hesitant
The EUR/JPY after a surging Friday’s session, where the cross posted sharp gains post NFP data, managed to touch a high of 132.57 on Asian trading session. Traders might have attributed the constant uptrend shift of the cross to the Nikkei major gains (+1.13%), alongside with the USD/JPY uptrend behavior. What’s more, there was a lot of short-covering that might assisted the cross to move a little higher, but the momentum bias is still bearish. The cross did not manage to sustain its gains as ECB’s Coeure comments on weekend are good reminders of the ECB’s new monetary policy stance for further easing, thus the single currency is still very vulnerable. Regarding the data news, the Japanese trade balance release at slightly better levels but market participants should probably pay much more attention to the upcoming to the Japanese Eco Watchers Survey.
Technical Outlook on the EUR/JPY
The EUR/JPY’s first crucial support area resides at the 131.44 (Ichimoku base cloud) - 131.55 (100-daily SMA), but if this area is decently breached, the pair could move further downwards near its 200-daily SMA (129.23). Karen Jones Head Technical Analyst of Commerzbank mentions that “EUR/JPY …… We regard the pattern on the market as a potential rising wedge (reversal pattern) and a weekly close below the 132.01 level should be enough to complete the pattern and introduce scope to 122.80.”