EUR/JPY: recovers back on to the 120 handle but lacks legs

Currently, EUR/JPY is trading at 120.14, up 0.10% on the day, having posted a daily high at 120.21 and low at 119.99.

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EUR/JPY is consolidating the minor recovery on the 120 handle after a yen frenzy overnight has the cross extending the recent sell-off all the way down to 119.67. The 1hr sma at 120.10 has been an anchor on the recovery and so too has the dollar, only able to manage a test of the same hourly ma and meeting previous support area where the recovery stalled. USD/JPY had dropped just under a cent overnight and claimed back 50 pips towards the close with gains in the NASDAQ and a mixed close on Wall Street. Meanwhile, the yen is picking up safe haven flows and should remain underpinned with the amount of uncertainty in the global economy and from the Trump administration.

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For the day ahead, the Eurozone offers the March consumer confidence data that last came in at -6.2 in Feb. Then, from the US, stock markets will be keeping an eye on the developments in respect to the House of Representatives vote on passing the legislation to dismantle Obamacare. We also have Chair Yellen speaking at a Fed community development conference. Dove Kashkari is also speaking later in on at the same conference called ‘Strong Foundations: The Economic Futures of Kids and Communities’. 

EUR/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the intraday technical readings support additional declines: "In the 4 hours chart, the pair has broken below its 100 and 200 SMAs, with the shortest maintaining its bullish slope, whilst technical indicators have partially lost their bearish strength within oversold readings, but remain far from suggesting downward exhaustion, indicating that a new leg lower is more than likely on a break below 119.70, towards 118.20, February lows."