Back
7 Oct 2013
EUR/JPY falls apart as US fiscal issue remains elevated
FXstreet.com (Athens) – The EUR/JPY is heading downwards since the kick-off of the Asian trading session on Sunday as US Boehner said to news wires that during the weekend “there was no progress at all regarding the US fiscal budget impasse” while the Nikkei index closed down 0.98%.
US fiscal issue jitters elevate, Nikkei falls apart; EUR/JPY breaks 50 EMA at 131.63
The EUR/JPY has started the week trading session on the “down” side, since the risk sentiment has hit immensely the “snooze” button. Being more précised, US House Speaker Boehner suggested that “there was no progress at all on the US government shutdown as well as on the debt ceiling issues during the weekend”, boosting the demand for safe-haven assets and currencies again. What’s more the Nikkei closed down 0.98%, dragging the cross further downwards. Elaborating on traders should always bear in mind that the correlation between the Japanese currency and the Nikkei index is heavily inversely correlated and being more precisely, investors should take upon consideration that the correlation between the Nikkei index and the JPY on the past 20days studies lies approximately at (-0.65%). While the common sense says that at the end -even the 12th hour- a solution will be found, it is more than plausible that till then, the tensions will not ease. Earlier, Moody's CEO McDaniel said through news wires that he "sees very low" chance of US default, while the Japanese Leading Index data were announced at soft levels. However the Japanese currency ignores the softer data, at the JPY draw the attention of the safe-haven flows around the globe.
Technical Outlook on EUR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend. The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”
Our personal aspect of view is that as long as the Nikkei is falling and we are amidst of US political “jitters”, we should pay attention to the crucial support key points. The first support zone lies at the area as of the 131.70-131.80 (Friday’s low was 131.77, at the time being is trading at 131.77), whilst the more seeming strong support area lies at 131.35-131.40 where a double bottom has been created.
US fiscal issue jitters elevate, Nikkei falls apart; EUR/JPY breaks 50 EMA at 131.63
The EUR/JPY has started the week trading session on the “down” side, since the risk sentiment has hit immensely the “snooze” button. Being more précised, US House Speaker Boehner suggested that “there was no progress at all on the US government shutdown as well as on the debt ceiling issues during the weekend”, boosting the demand for safe-haven assets and currencies again. What’s more the Nikkei closed down 0.98%, dragging the cross further downwards. Elaborating on traders should always bear in mind that the correlation between the Japanese currency and the Nikkei index is heavily inversely correlated and being more precisely, investors should take upon consideration that the correlation between the Nikkei index and the JPY on the past 20days studies lies approximately at (-0.65%). While the common sense says that at the end -even the 12th hour- a solution will be found, it is more than plausible that till then, the tensions will not ease. Earlier, Moody's CEO McDaniel said through news wires that he "sees very low" chance of US default, while the Japanese Leading Index data were announced at soft levels. However the Japanese currency ignores the softer data, at the JPY draw the attention of the safe-haven flows around the globe.
Technical Outlook on EUR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend. The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”
Our personal aspect of view is that as long as the Nikkei is falling and we are amidst of US political “jitters”, we should pay attention to the crucial support key points. The first support zone lies at the area as of the 131.70-131.80 (Friday’s low was 131.77, at the time being is trading at 131.77), whilst the more seeming strong support area lies at 131.35-131.40 where a double bottom has been created.