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EUR/JPY finds more legs but Wall Street down/Yen up, time to fade?

  • EUR/JPY higher in overbought territory.
  • Euro holds gains above H&S neckline vs the greenback. 

EUR/JPY is finding fresh legs as the NY session progresses. Despite the recent drop in the benchmark indices on Wall Street, currently, EUR/JPY is trading at 133.57, up 0.77% on the day, having posted a daily high at 133.68 and low at 132.48. 

USD/JPY remains in red near mid-113s as US stocks falter

The euro is on fire and the greenback has suffered a blowout of support and in testing below the 94 handle for the first time since October's business. EUR/USD is above the neckline support and testing fresh highs for the session at 1.1774. 

Time to fade EUR/JPY?

The eurozone's data was a driving force what with upbeat German flash Q3 GDP figures and EMU’s economic sentiment for the current month, (30.9 vs 29.3 expected), set the cross on fire as German bund yields firmed. The 10-year benchmark climbed above 0.43% recording at fresh 3-week highs overnight. However, the dollar is renowned for bouncing back and it may not take much to hurt the cross if Wall Street benchmarks continue to struggle, keeping the yen on the backfoot making for a fading opportunity below 133.80. Wall Street still has some work to do in the recovery attempt, despite the correction that is underway at the time of writing. 

EUR/JPY levels

Meanwhile, the 100 SMA on the 4hr sticks is flat/bearish. The daily double top is also compelling. EUR/JPY is back above 133 the figure and analysts at Commerzbank explained that a move above the 134.58 November 2015 high would target the 2008-2017 resistance line at 140.90/141.00. To the downside, the 4-hr sticks hold the 200 and 100 SMA just below 132.80 in the 132.60's. The 4-hr indicators are pointing to a continuation of the upside with RSI above 70.

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