The cross clocked a low of 120.65 in early Asia after failing at 121.40 levels on Monday.
Risk-on in Europe
The rally in the cross in the Asian session suggests the equity markets in Europe are more likely to cheer Macro’s win and more importantly Le Pen’s loss in the Presidential debate.
The odds of Le Pen victory dropped last week after Dutch election results signaled ‘peak populism’. The anti-EU candidate’s poor showing at the Presidential debate could weigh over Franco-German yield spread; keep EUR in demand and the safe haven Yen on the back foot.
EUR/JPY is likely to act as a barometer of risk sentiment in the markets in the run up to French elections.
EUR/JPY Technical Levels
The cross was last seen trading around 121.19 levels. A break above 121.34 (5-DMA) would expose 121.54 (10-DMA). A violation there would open up upside towards 122.25 (Mar 17 high). On the other hand, a breakdown of support at 121.00 (zero figure + 50-DMA) could yield a sell-off to 120.44 (100-DMA) and possibly to 120.00 (zero figure).
- R3 121.40
- R2 121.28
- R1 121.17
- PP 121.05
- S1 120.93
- S2 120.82
- S3 120.70
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