30 Aug 2013
EUR/JPY finishing 1st thrust lower after failing at 132.73 resistance
FXstreet.com (Barcelona) - The EUR/JPY took a tumble Thursday on bad German economic data and Yen inflows from nervous global investors. That tumble may have a bit more to go before a bounce commences.
EUR/JPY data is due out, but EUR/JPY might fall into “risk proxy” category again
In several hours, Japanese housing starts and construction orders will be released – neither of which has the potential to move EUR/JPY in a big way. A short while after that, traders will react to German retail sales data, EuroZone Consumer Confidence and a small batch of other minor data from Europe.
For years, the EUR/JPY was used by technicians as a proxy for the global risk trade. That changed, however, when systemic issue and ECB intervention clouded the issue. Now, though, many analysts consider Europe’s systemic issues a thing of the past – so perhaps EUR/JPY can regain its place as a global risk proxy and hedging tool – along with AUD/JPY.
Technical take on EUR/JPY
Technicians note that since 132.73 “correction resistance” held strong, there’s a growing chance that a substantial sell-off takes place in EUR/JPY that could reach down to 123.55 – a Fibonacci retracement line. Thursday’s selling, they note, could have been the initial stages of that sell-off. Resistance – which they say should be sold into – still comes in at 132.73. More trading action must take place to establish any other reliable resistance levels.
EUR/JPY data is due out, but EUR/JPY might fall into “risk proxy” category again
In several hours, Japanese housing starts and construction orders will be released – neither of which has the potential to move EUR/JPY in a big way. A short while after that, traders will react to German retail sales data, EuroZone Consumer Confidence and a small batch of other minor data from Europe.
For years, the EUR/JPY was used by technicians as a proxy for the global risk trade. That changed, however, when systemic issue and ECB intervention clouded the issue. Now, though, many analysts consider Europe’s systemic issues a thing of the past – so perhaps EUR/JPY can regain its place as a global risk proxy and hedging tool – along with AUD/JPY.
Technical take on EUR/JPY
Technicians note that since 132.73 “correction resistance” held strong, there’s a growing chance that a substantial sell-off takes place in EUR/JPY that could reach down to 123.55 – a Fibonacci retracement line. Thursday’s selling, they note, could have been the initial stages of that sell-off. Resistance – which they say should be sold into – still comes in at 132.73. More trading action must take place to establish any other reliable resistance levels.