EUR/JPY: Bears testing below 118 handle with 116.58 on the radar

• The EURUSD is weaker after the surprise resignation of a ECB board member.
• EUR/JPY bears breaking into 117 support territory where support can be seen at the 116.58/115.87 recent lows.

EUR/JPY is consolidating the recent correction from the daily lows down in the 117.50s, currently trading a 17.83 having travelled to a high of 118.05 in recent trade. The euro is on the backfoot while the USD/JPY reaches a fresh high as investor sentiment stabilises with the pace of political developments has eased. The EURUSD is weaker after the surprise resignation of a ECB board member with prices moving in on a major support level around 1.0925 which guards the 1.0820/40 zone lower down. 

Yen weakens as Trump said that he expects a trade deal sooner than later

As for the Yen,  Trump’s talk at the UN where he said he wouldn’t accept a ‘bad deal’ with China was a supportive factor, but as ever, the headlines soon switched up and the currency has recently lost ground as suggestions that the US-China trade deal may occur soon helped ease risk sentiment with Trump saying that he expects a trade deal sooner than later when he said that the Chinese were making big agricultural purchases from the United States, including of beef and pork.

EUR/JPY levels

"EUR/JPY has sold off to support at the 117.55/52 August 12 and September 12 lows and we would allow for a rebound from here towards the downtrend at 119.45," analysts at Commerzbank said. 

"This resistance is reinforced by 120.05, the 38.2% retracement. Further support can be seen at the 116.58/115.87 recent lows. Above 120.05, resistance can be seen between the June lows at 120.79/96 as well as at the 121.38 late July high."