EUR/JPY: bull's commitments fading at the 132 handle
- EUR/JPY struggles to hold onto the 132 handle.
- Yen has found some traction on risk-off.
EUR/JPY struggles to hold onto the 132 handle in Tokyo with a resurgence in the Japanese yen on the back of some bearishness around the US economy with respect to the recent article from the Washington Post that states that the Senate GOP will to consider a 1 Yr Corporate Tax cut delay. Currently, EUR/JPY is trading at 131.91, down -0.12% on the day, having posted a daily high at 132.16 and low at 131.90. The overall theme overnight was slightly risk-off and the yen benefitted from that.
- USD/JPY drops on Washington Post: 'Senate GOP said to consider 1 Yr Corporate Tax cut delay'
- Wall Street pares early gains to close lower amid tax plan uncertainty
Meanwhile, the euro is firming up below the 1.16 handle after making fresh lows in the 1.1550 regions while ECB President Draghi explained that the condition for a deposit rate hike has not yet been met. Subsequently, this undermined the euro in the face of falling Euro yields while the Bunds broke the primary uptrend.
Other EZ data that was mixed overnight
EU retail sales surged though for the month of September by 0.7% with an annual growth of 3.7%. However, Germany's Industrial Production dropped -1.6% in Sep against previous 2.6% advance. Y/Y, production rose 3.6%, but below expectations of 4.4%.
Analysts at Commerzbank explained that EUR/JPY’s near-term rebound appears to have terminated 133.135:
"A close below 131.68 would then target the mid-September low at 130.64, the September low at 129.40 and the August low at 127.57. Bottom of the cloud support lies at 130.98. Where are we wrong near term? A move above the 134.58 November 2015 high would target the 2008-2017 resistance line at 140.90/141.00."