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EUR/JPY rejected at 5-DMA, heads towards 50-DMA?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 14, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The EUR/JPY cross reversed gains and fell back into the negative territory, extending weakness into a third-day this Monday.

    EUR/JPY unable to extend gains beyond 133 handle

    Currently, the EUR/JPY pair trades -0.29% at fresh session lows of 132.59, heading for a retest of 132.50 levels, where the 50-DMA intersects. The renewed selling witnessed in the EUR/JPY can be attributed to the sudden strength seen in the yen against its American rival. USD/JPY corrects lower and now tests 121 handle.

    On the other hand, heavy losses in the EUR/USD pair also collaborates to the downside in EUR/JPY while the US dollar continues to trade firmer against its major competitors on the back of rising US treasury yields.

    Looking ahead, expectations of a Fed rate rise this week is likely to keep the greenback underpinned, which could in turn keep the EUR/JPY cross confined below 133 handle.

    EUR/JPY Technical Levels

    To the upside, the next resistance lies at 133.04/10 (5-DMA/ daily high), above which it could extend gains to 133.50 (10-DMA). To the downside, the cross finds immediate support at 132.52 (50-DMA), below that 131.95 (20-DMA), could act as a major support.
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