EUR/JPY analysis: yen gains accelerate on Wall Street's slump

Valeria Bednarik FXStreet

EUR/JPY Current price: 120.96

The EUR/JPY pair closed the day pretty much flat below 121.00, as the Japanese yen surged in the American session, while the common currency pared gains and consolidate near the highs reached early Europe. US Treasury yields plunged to fresh 2017 lows, with the 10-year benchmark at 2.42% from previous 2.47%, while equities also fell sharply, following comments from Fed's Neel Kashkari, who said that he doesn't believe a financial crisis may occur if stocks fall. Furthermore, he estimated that the US Central Bank is about 75 bps relative to neutral when it comes to rates. The pair traded as high as 121.82 before trimming all of its daily gains, now gaining downward momentum heading into the Asian session, at least short term, given that in the 1 hour chart, the price is well below its 100 and 200 SMA, whilst technical indicators extended their declines within bearish territory, at fresh session lows. In the 4 hours chart, the price is now below a bullish 100 SMA, with the 200 SMA now standing around 120.60, also a strong static support, while the RSI indicator heads south around 41, and the Momentum hovers directionless within bearish territory, all of which favors additional slides on a break below the mentioned support.

Support levels: 120.60 120.15 119.70

Resistance levels: 121.40 121.85 122.30

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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.

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