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EUR/JPY: chance of a strong recovery limited - FXStreet

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 9, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Valeria Bednarik, chief analyst at FXStreet explained that the EUR/JPY sunk to a daily low of 128.25, as the Japanese yen soared during the Asian session, tracking socks in their way lower.

    Key Quotes:

    "The currency has erased all of its latest losses against its major rivals, those triggered by the latest BOJ's decision to extend QE. Some market talks over a new possible intervention have surged back this week, but seems quite unlikely that the Bank of Japan will waste time, and money, in the ongoing environment. The pair recovered from the mentioned low on EUR's demand, advancing over 200 pips before losing upward steam.

    In the 1 hour chart, the latest recovery stalled around a bearish 100 SMA, while the technical indicators are turning south from near overbought levels, indicating some further short term slides for the pair.

    In the 4 hours chart, the price is currently developing above its 100 and 200 SMAs, both converging around 129.40, providing an immediate support, while the technical indicators have recovered from oversold levels and continue heading higher, but remain within negative territory, limiting chances of a stronger recovery ahead."
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