EUR/JPY: Risks skewed to downside as Eurozone faces second wave of coronavirus

  • EUR/JPY's moderate monthly gain could be short-lived due to coronavirus concerns. 
  • Renewed lockdown restrictions across Eurozone strengthen the case for additional ECB easing.

With several Eurozone nations reimposing lockdown to control the coronavirus's second-wave, the common currency area faces the risk of a double-dip recession. Hence, the path of least resistance for EUR/JPY appears to be on the downside. 

Italy approves partial lockdown

According to Bloomberg, Italy has approved a plan to limit opening hours for bars and restaurants and shut entertainment, gambling venues, and gyms, and urged citizens not to travel.

The new measures, which are harshest since the end of May's national lockdown, will begin on Monday and remain in effect until Nov. 24.

Further, Spain has approved a state of emergency and announced a national curfew from 11 p.m. to 6 a.m.

The new lockdown restrictions risk torpedoing the already fragile economic recovery and put more pressure on the European Central Bank to provide more stimulus. The central bank is expected to boost bond purchases from December to counter Eurozone's negative inflation. 

The Bank of Japan (BOJ), too, is likely to downgrade inflation and growth forecasts this week but is unlikely to take immediate action (ramp up stimulus). 

At press time, the pair is trading at 124.10, representing a 0.42% month-to-date gain. 

Technical levels


Today last price 124.10
Today Daily Change -0.10
Today Daily Change % -0.08
Today daily open 124.21
Daily SMA20 124.04
Daily SMA50 124.6
Daily SMA100 123.53
Daily SMA200 121.14
Previous Daily High 124.25
Previous Daily Low 123.41
Previous Weekly High 125
Previous Weekly Low 123.33
Previous Monthly High 127.08
Previous Monthly Low 122.38
Daily Fibonacci 38.2% 123.93
Daily Fibonacci 61.8% 123.73
Daily Pivot Point S1 123.67
Daily Pivot Point S2 123.12
Daily Pivot Point S3 122.83
Daily Pivot Point R1 124.5
Daily Pivot Point R2 124.79
Daily Pivot Point R3 125.33



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