EUR/JPY looking for direction below the 123.00 mark
|- EUR/JPY exchanges gains with losses in sub-123.00 levels.
- US-China trade, geopolitics keep driving markets’ mood.
- A test of the 122.00 neighbourhood remains a palpable chance.
EUR/JPY continues to trade within a broad consolidative theme around the 123.00 handle, although a surpass of this important hurdle still remains elusive.
EUR/JPY focused on trade, risk trends
The absence of relevant headlines in the protracted US-China trade dispute leaves developments from the US-Huawei effervescence as one of the main drivers among market participants in past hours.
In fact, Chinese tech giant Huawei is the centre of the storm nowadays after the White House blacklisted the company and later prohibited American firms to trade software and components with the Asian company.
Nothing from the euro calendar today, while ECB’s VP L.De Guindos said at an event in London that the ongoing slowdown in the region could prompt some banks to increase their capital buffers. He also added that the mentioned deceleration favours the occurrence of tail events.
What to look for around JPY
The main driver behind the price action around the Japanese Yen is expected to come from the risk appetite trends and their effects on the safe haven flows. In this regard, the US-China trade concerns plus rising geopolitical fears from US-Iran friction and the potential slowdown in the global economy are seen sustaining the higher demand for JPY. On the soft side for JPY, although largely priced in byt investors, the Bank of Japan remains strongly committed to its QQE programme.
EUR/JPY relevant levels
At the moment the cross is gaining 0.01% at 122.90 and faces initial resistance at 123.61 (high May 10) followed by 123.79 (21-day SMA) and finally 125.23 (monthly high May 1). On the other hand, a breach of 122.08 (low May 15) would aim for 120.54 (monthly low Jan.17 2017) and then 118.82 (2019 low Jan.3 ‘flash crash’).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.