EUR/JPY: Downside momentum would be reinforced if euro finally corrects lower – MUFG

Analysts at MUFG Bank, continue to hold onto the idea of a short trade in EUR/JPY with a target at 122.80 and stop-loss at 127.20, after entering at 125.30. 

Key Quotes:

“EUR/JPY has broken lower over the past week as the JPY has strengthened more broadly. The stronger JPY is testing the new leadership in Japan who have signalled that they want to maintain policy continuity and FX stability. It was backed up by comments from the BoJ as well who stated that they will continue to work closely with the government. Market participants will be watching to see how they respond to a stronger JPY. New Prime Minister Suga is scheduled to speak with President Trump over the weekend which will attract market attention given his lack of experience in foreign policy to date. At the same time, the ongoing dovish shifts in major central bank policy are diluting the negative impact on the JPY from BoJ’s own easing and helping to reverse JPY weakness.”

“Downward momentum in EUR/JPY would be reinforced if the EUR finally corrects lower too. According to our yield-based valuation model, the EUR has become significantly overvalued. Long EUR positions remain close to record highs. It is encouraging more of a push back against EUR strength from the ECB.”

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD edges above 1.18 amid mixed US data, slim stimulus hopes

EUR/USD is trading above 1.30 after US Durable Goods Orders beat expectations but Consumer Confidence missed estimates. Hopes for a US stimulus deal are slim with a week left until the elections.


GBP/USD stabilizes above 1.30 amid Brexit and covid uncertainty

GBP/USD is hovering above the round 1.30 levels as rising UK COVID-19 cases, uncertainty about Brexit, and PM Johnson's political problems weigh on sterling. US data has been mixed.


XAU/USD pares early gains, turns flat near $1,900

For the third straight trading day on Tuesday, the XAU/USD pair is moving sideways above $1,900 as participants wait for the next significant catalyst. After climbing to a daily high of $1,910 earlier in the day, the pair lost its traction and was last seen trading virtually unchanged on the day at $1,902.

Gold News

Bitcoin breaks new yearly highs; the road to $15,000 is clear

Bitcoin breaks new yearly highs and hits $13,464. The road to $15,000 is clear as there are no major resistance levels above the current price.

Read more

WTI trims losses and moves near $39.00/bbl ahead of API

Following two consecutive daily pullbacks, prices of the West Texas Intermediate regain some buying interest and reach the $39.00 mark per barrel on turnaround Tuesday.

Oil News