Forex: EUR/JPY down 40 points, trading 128.20

Fri, Dec 18 2009, 01:29 GMT
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FXstreet.com (London) - Yen has risen in early trading against the Dollar. USD/JPY currently trades at 89.41, after a correction to an initial fall of 73 points, to day lows of 88.93. Both currencies have recently been seen as the major funding currencies due their cheap borrowing rates, and as such rise in times of weak risk appetite.

Support for the pair can be found at 88.93 (Session low) and after that 88.43 (strong support zone Dec 14). On the upside should Dollar strengthen return against the Yen this session, 90.35 (previous session high) followed by 90.75 (around Dec 4 High).

EUR/JPY has been an interesting pair as the currencies have exhibited a fairly strong negative correlation, however in recent trading this correlation is starting to break down. The pair currently trade at 128.20 down 40 points for the session.

James Chen, of FXSolutions.com, gives us technical insight on the pairs trading range: “In this case, key downside support levels within the channel reside around the 88.00 and 87.00 price regions. Any significant upside breakout above the parallel downtrend channel could indicate a potential trend reversal with an initial resistance target in the 92.00 price region.”

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