EUR/JPY: Four-month support line at risk, 127.64
- EUR/JPY has been sent back by the bears on attempts towards the 100-D SMA.
- EUR/JPY at risk of heavy risk sentiment, 128 handle vulnerable.
The cross has been trading within a range of between 128.18 and 128.94, oscillating around the 21-D SMA but bullish attempts have been met with strong supply, guarding the 100-D SMA.
The price action was subject to a poor start on Wall Street before risk rebounded and stocks managed to get up off the floor for a positive close. Concern over US-China relations was the main focus as the Huawei CFO bail hearing in Vancouver was set to resume.
European politics weigh
EUR/USD was pulled down by the slide in GBP/USD. "Facing a huge loss on the parliamentary vote on her Brexit plan, UK PM May cancelled the vote which had been set for today and did not set a new date for a vote. She is now off to the Netherlands as part of an attempt to extract more concessions from the EU. The UK is thus a step closer to what is assumed to be a very disorderly “no deal” Brexit. GBP/USD fell from 1.2750 during the Sydney afternoon to a low of 1.2507 on news of the vote being pulled," analysts at Westpac explained.
Meanwhile, from a technical perspective, the 100-D SMA is located at 129.21 and support is located at the 4-month support line at 127.64. "Further down lies the October trough at 126.64. While above here longer term scope remains on the topside. Initial resistance are the 55- and 200-day moving averages at 129.37/78. To reassert upside pressure the market will need to overcome the 130.15 7 th November high," analysts at Commerzbank explained.