EUR/JPY retreats from almost 3-yr lows, near 124

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 23, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Risk-off sentiment dominates Asia this Tuesday, with the demand for the safe-havens on the rise, and therefore keeps the EUR/JPY cross under strong selling pressure near the lowest levels since April 2013.

    EUR/JPY drops for the 6th straight session

    The EUR/JPY pair drops -0.38% to 124.06, stalling its recovery near 124.25 region. The cross was heavily offered at Tokyo open as risk-off moods returned to markets, boosting the safe-haven bids for the yen. The prices fell to almost three-year lows at 123.72 after the USD/JPY pair dipped to 112 handle as risk-off escalated thereon after the Asian indices turned negative alongside oil.

    Moreover, the PBOC lowered the yuan reference rate by most in six weeks, which spooked investors, who believed that the yuan fixes will remain stable heading into the G20 meeting due later this week.

    However, over the last hours, EUR/JPY is seen recovering ground somewhat above 124 handle as the Japanese intervention chatter is doing the rounds, lifting USD/JPY off 112 to now trade around 112.35 levels.

    While the EUR/USD pair remains better bid amid risk-averse conditions and hovers below 1.1050 levels, offering little help to the cross. In the day ahead, a slew of fresh US economic data will be reported, which may provide fresh cues on the USD moves. In the meantime, the sentiment on the equities and oil markets will continue to dominate.

    EUR/JPY Levels to consider

    The pair has an immediate resistance at 124.96/125 (5-DMA/ round number), above which 125.83 (1h 100-SMA) would be tested. On the flip side, support is seen at 123.72 (multi-year lows) below which it could extend losses to towards 123 (April 2013 Levels).
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