EUR/JPY steady above 120.00 with upside attempts capped below 120.60/70
- EUR/JPY stalls between 120.00 and 120.60/70 after bouncing up from 119.30.
- The euro remains vulnerable amid a negative market sentiment.
- EUR/JPY to retest 200-week at 124.61 on a break of 121.14 – Commerzbank.
The euro is ticking down against the safe-haven Japanese yen on Thursday although still steady above 120.00. The pair has lost about 0.2% so far today with risk sentiment weighed on the back of growing coronavirus cases and US Government’s plan to increase tariffs on European products.
The euro consolidates above 120.00 on a risk-off market
EUR/JPY recovery from Monday’s lows at 119.30 has stalled below 121.00 with the common currency weighed by the negative market sentiment. The worldwide increase of COVID-19 infections has raised concerns about a second wave of lockdowns, curbing investors’ hopes of a quick return to normality.
On another note, news reports about a US Government plan introduce new tariffs to a number of European products and the gloomy economic forecasts released by the International Monetary Fund, have dampened risk appetite further, increasing selling pressure on the euro.
EUR/JPY to retest 200-week at 124.61 on a break of 121.14 – Commerzbank
In a bigger picture, Commerzbank’s Karen Jones sees the euro extending its recovery to revisit the 200-week MA, at 124.61, “The market recently charted an outside day to the topside (or a bullish engulfing pattern) and recovered off the 200-day ma at 119.60 and the 50% retracement at 119.43. We look for the market to stabilise here and recover further, and we should see the market once again retest the 200-week ma at 124.61. This guards the 128.20 2014-2020 resistance line.”
EUR/JPY key levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
