- EUR/JPY reversal from 125.08 high finds support at 124.30 area
- The yen regains lost ground on Monday as market sentiment deteriorates.
- Technically, the near-term trend remains positive while above 124.30.
The euro reversal from last week’s highs right above 125.00 has been contained at 124.28 before ticking up to the mid-range of 1.2500. The pair lost ground on Monday, to put an end to a 3-day rally, weighed by market concerns about the COVID-19 pandemic as the virus’ second wave spreads through Europe.
The yen appreciates with market sentiment deteriorating
In the absence of key macroeconomic data, with the US and Canadian markets closed for bank holidays, the increase of coronavirus infections in Europe and the rejection of Trump’s stimulus package last Friday have soured the market mood, boosting the yen across the board.
Furthermore, the lack of progress in the Brexit negotiations between the UK and the EU, with the clock ticking towards the October 15 deadline, is weighing on the euro in favour of the safe-haven yen.
The euro remains bullish while above 124.30
From a technical point of view, the EUR/JPY remains trading above trendline support from September 28 low, now at 124.30. On the upside, the nearest potential targets are 124.75 (intra-day level) and 125.05/10 (October 9 high), ahead of 125.80 (September 15 high).
On the downside, a clear breach of the uptrend resistance line, at 124.30, would invalidate the near-term uptrend and might set the pair towards September 6 lows at 123.85 and the 100-day SMA art 123.25.
Technical levels to watch
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