EUR/JPY bulls reclaiming 131 handle as risk-on mood is back

• Investors shrug-off trade war tensions,  yen loses value against most majors.  
• The EUR/JPY bulls are pushing above the 131 figure and  targetting 132.

The EUR/JPY is trading at around 131.20 up 0.27% as the New-York forex session on Wednesday is slowly coming to a close. The day started out with a strong risk-aversion tone as China retaliated with more tariffs in response to Trump’s protectionism measures. The yen pairs went down (considered safe-haven), gold soared, and stocks went down initially. As the New-York session started, the wind of pessimism abated and the yen sold-off across the board along with gold. Meanwhile, US stocks rebounded strongly from yearly lows with the three main indices ending the day in green.

Tomorrow the Eurozone will see mid-tier data with Producer Price Index, Retail Sales and Markit PMI Composite while Japan will release its Overall Household Spending in March by the Ministry of Internal Affairs and Communications along with Japanese foreign-exchange Reserves in March.

EUR/JPY weekly chart

The EUR/JPY on the weekly chart is currently consolidating above the 200-period simple moving average and just above the 50-period simple moving average at 130.55. The cross has been ranging for the last five weeks in the 129.30-132.00 range. The bulls need to close on a weekly basis above 132.00 to claim a reversal up, while the bears need a close below the 129 handle to resume the bear trend. The weekly RSI is currently at 47.36 while the MACD bear momentum is slightly slowing down. 

EUR/JPY daily chart

On Tuesday the bulls rebounded from the 130 handle preventing the bears from erasing the gains made on March, 26. The market is trading below its 50, 100 and 200-period simple moving average which is generally seen in bear trends, however, the bulls are at work attempting to form a reverse head and shoulder bottom. The daily RSI and the MACD indicators are constructive to the upside, signaling the continuation of the trading range or a bull breakout if the 132 handle breaks to the upside.

EUR/JPY 4-hour chart

The EUR/JPY on the 4-hour chart is capped by the 200-period simple moving average dynamic resistance. Resistance is seen close to current prices at the 131.30 swing high while key resistance is seen at 132.45 swing high. On the flip side, supports are seen at 130 swing low and at 128.94 cyclical low.