EUR/JPY: Below 4H 100MA, focus on stocks
- EUR/JPY is chipping away at key average resistance on the 4-hour chart.
- A break higher may remain elusive if stocks extend Tuesday's slide.
- The pair fell on Tuesday despite upbeat German data.
EUR/JPY is reporting marginal gains at press time but is struggling to post sustainable gains above the 4-hour chart 100-candle moving average at 121.83. The bid tone around the Japanese Yen has weakened somewhat with the futures on the S&P 500 reporting a 0.12% gains.
Focus on risk sentiment
The stock market fell on Tuesday with the Dow Jones Industrial Average shedding 152 points or 0.5% on reports that the deadly coronavirus from Wuhan, China had
reached the US. Stocks in Europe and Asia also suffered losses on virus scare, sending the anti-risk Japanese yen higher.
As a result, the anti-risk yen gained ground against the single currency and other majors.
EUR/JPY fell 0.41% and closed below 122.00 on Tuesday, as the risk-off overshadowed the upbeat German data – the ZEW Indicator of Economic Sentiment rose 16 points to 26.7 to hit the highest value since July 2015.
The pair may cheer the signs of life in the German economy on Wednesday if the stock markets regain poise. However, the 50-day average at 121.10 could come into play if the flight to safety gathers pace.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
