EUR/JPY: Off 7-month lows, bargain hunters capping downside?

Trade war fears pushed EUR/JPY down to a 7-month low of 128.94.
Bargain hunters/Japanese insurers seem to have bought USD/JPY below 105.00.

Omkar Godbole FXStreet Contributor

The Japanese Yen jumped across the board as President Trump's decision to impose tariffs on $60 billion worth of Chinese imports sent US stock prices tumbling.

The Dow Jones Industrial Average closed down 723 points - the biggest point decline since Feb. 8, when it fell by more than 1,0000 points.

Consequently, the EUR/JPY cross fell to 128.94 in Asia - the lowest level since late August. As of writing, the currency pair is trading at 129.25. The recovery could be due to Japanese insurers and bargain hunters stepping in to buy dollars below 105.00. Japan's Nippon Life had announced earlier this year that it would buy sub-105.00, according to a Reuters report.

That said, the relief could be short-lived as the S&P 500 futures are down 0.5 percent, signaling the investors see a real risk of a full-fledged US-China trade war.

EUR/JPY Technical Levels

A break below 128.48 (Aug. 24 low) would open doors for 128.05 (Aug. 11 low) and 127.56 (Aug. 18 low). On the other hand, a break above 129.35 (March 5 low) could yield a re-test of 130.18 (descending 5-day MA) and 130.68 (10-day MA).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	Shrinking
1H	Bullish	Neutral	Expanding
4H	Strongly Bearish	Neutral	High
1D	Strongly Bearish	Oversold	Expanding
1W	Bearish	Neutral	High
Updated Mar 23, 00:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.