Fading risk sentiment has certainly pushed the Japanese yen higher against its counterparts, and may continue to strengthen over the following weeks as investors continue to limit their temperament for risk.
Currency Pair: EUR/JPY Short-Term Bias: Short Chart: 60 Min Charts
Analysis Update
The EURJPY has move higher after falling to an intraday low of 136.59, but continues to bounce around 139.32 (38.2% Fib level of 125.45-162.05), which suggests that the underlying downtrend may lead pair lower over the next few days. Yesterday, we saw the pair break well below its current range to hit an intraday low of 135.04, and I anticipate the pair to move below this level over the following weeks as investors continue to lower their risk sentiment. The downward momentum should lead the pair to fall below its current range in the near-term, and I expect the pair to test the 8/22/05 low of 133.51 for support on its way to the downside. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
Fading risk sentiment has certainly pushed the Japanese yen higher against its counterparts, and may continue to strengthen over the following weeks as investors continue to limit their temperament for risk. After falling 700+ points yesterday, the EURJPY has short-term support near 135.00, and has crossed back above 139.00. Amid the minor recovery, the pair looks to be finding resistance near 139.31 (38.2% Fib level of 125.45-162.05), and the downward momentum may drag the euro-yen lower over the next few hours. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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