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9 Sep 2015
EUR/JPY: resistance coming in on Wall Street turing less positive
FXStreet (Guatemala) - EUR/JPY has gone from strength to strength and has penetrated the 200 SMA at 134.54 and marched on to the 135 handle.
EUR/JPY continues to garner support from risk appetite returning to markets with consecutive days of a rally in Global stocks. The Nikkei was the stand out performer that rallied over 7.5% supported on both counts of Abe announcing that they will lower the corporate tax rate by at least 3.3% next year and positive vibes stemming from China. China's Shanghai Composite also rallied and for the second day this week, and was up 2.4%. on the close.
Optimism in China was rife due to the Ministry of Finance vowed to strengthen fiscal policy, boost infrastructure spending and speed up reform of its tax system. European stock markets also followed Asia's lead, and the main indices were opening as high as 2.%, the Dax opened +2.1% and FTSE were up 1.9%, now closing slightly lower than highs across the board. Wall Street joined the rally when the Dow Jones jumped 150 points, or nearly 1%, on the open although we are now seeing a sell-off on mounting fears that a Fed hike is due with the strong jobs openings data in the US today printing 5.753m vs 5.288m expected and 5.322m previous. EUR/JPY thus meets some resistance at 135.19 highs.
EUR/JPY: downside levels
On a turnaround while the cross remains below 135.20/80 and 136 channel psychological resistance, EUR/JPY's support comes at 134.95, 134.54 (200 hourly SMA), 134.03 (50 hourly SMA). Karen Jones, chief analyst at Commerzbank explained, on the downside, they target the 2013-2015 support line at 127.46 currently. "Initial support will be the 131.80 then 129.28 Fibonacci retracements of the move seen this year."
EUR/JPY continues to garner support from risk appetite returning to markets with consecutive days of a rally in Global stocks. The Nikkei was the stand out performer that rallied over 7.5% supported on both counts of Abe announcing that they will lower the corporate tax rate by at least 3.3% next year and positive vibes stemming from China. China's Shanghai Composite also rallied and for the second day this week, and was up 2.4%. on the close.
Optimism in China was rife due to the Ministry of Finance vowed to strengthen fiscal policy, boost infrastructure spending and speed up reform of its tax system. European stock markets also followed Asia's lead, and the main indices were opening as high as 2.%, the Dax opened +2.1% and FTSE were up 1.9%, now closing slightly lower than highs across the board. Wall Street joined the rally when the Dow Jones jumped 150 points, or nearly 1%, on the open although we are now seeing a sell-off on mounting fears that a Fed hike is due with the strong jobs openings data in the US today printing 5.753m vs 5.288m expected and 5.322m previous. EUR/JPY thus meets some resistance at 135.19 highs.
EUR/JPY: downside levels
On a turnaround while the cross remains below 135.20/80 and 136 channel psychological resistance, EUR/JPY's support comes at 134.95, 134.54 (200 hourly SMA), 134.03 (50 hourly SMA). Karen Jones, chief analyst at Commerzbank explained, on the downside, they target the 2013-2015 support line at 127.46 currently. "Initial support will be the 131.80 then 129.28 Fibonacci retracements of the move seen this year."