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Forex: EUR/JPY retesting 119.50; Nikkei below 2%

FXstreet.com (Barcelona) - The Japanese Yen is strengthening across the board at the Tokyo open, building up on recent gains from Monday, with reports suggesting that speculative positioning were recently greatly reduced says Sean Lee, founder at FXWW, who still thinks that players will be looking to buy any big exhaustive dips looking to join the overall bull trend.

The benchmark Nikkei 225 has opened with falls of over 2%, leading to a 20+ pips decline in the EUR/JPY to retest recent fresh 1-month low at 119.48. Sean adds that with EUR/JPY closing back below 120.00, "it will give short positioners (like myself) renewed confidence that the first Fibo retracement to 117.25 may indeed soon come into play."

According to Valeria Bednarik, chief analyst at FXstreet.com: "The pair maintains a strong bearish tone, with the hourly chart showing price near 119.50 daily low and indicators heading south below their midlines; strong support is found at 118.70, Feb 25th daily low, with a weekly close below this last confirming the midterm bearish continuation with 115.50 then at sight."

Yesterday, we mentioned that looking north, key area where opportunities to reinstate shorts may arise may be found at 121.60/85. However, since that area remains quite far away from current price (over 200 pips), another area near by not to be under-estimated is found at 120.00 up to 120.20 resistance, ahead of 120.65/85 supply, as per yesterday's big drop.

Forex: EUR/USD breaks higher on the back of a broad USD move

EUR/USD has recently broken to the upside in a broad selling USD move, finding resistance so far at fresh weekly highs 1.2870, few pips shy of yesterday's highs. The rally comes in the back of a Yen push higher to fresh 1-month highs and Nikkei selling off for second consecutive day in this new fiscal year in Japan.
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