EUR/JPY analysis: further yen strength expected, 117.00 possible now
EUR/JPY Current price: 118.32
The EUR/JPY pair plunged to 118.23, its lowest since last November, and closed the week a handful of pips above this last, as the Japanese yen soared against all of its major rivals, on the back of plummeting US Treasury yields. Investors are disappointed on the lack of progress from US Trump's administration regarding a tax reform, particularly after Treasury Secretary Mnuchin said on Thursday that he "hopes" it will pass through the Congress next August. Yields fell to fresh yearly lows, with the 10-year note benchmark down to 2.318%. Technically, the daily chart shows that the pair has broken below its 100 DMA for the first time since early November, whilst it reached the 50% retracement of the November/December bullish run. In the same chart, technical indicators have accelerated towards the downside within bearish territory, anticipating some further slides towards the 119.60/117.10 region, where the pair presents its 200 DMA and the 61.8% retracement of the mentioned advance. Shorter term and according to the 4 hours chart, technical indicators have turned sharply bearish, now hovering near oversold levels, whilst the 100 and 200 SMAs have accelerated their declines well above the current level, also supporting a bearish extension on a break below 118.10, the immediate support.
Support levels: 118.10 117.60 117.20
Resistance levels: 118.60 119.00 119.50
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
