EUR/JPY fades spike above 133
- The yen strengthens on risk-off in Asian equities.
- EUR/JPY fades spike to 133.23.
The bid tone around the Japanese Yen strengthened on signs of risk aversion in the Asian equities. As a result, the EUR/JPY pair fell from the session high of 133.23 to 132.71. As of writing, the cross is at 132.88; still down 0.14 percent on the day.
Japan's Nikkei index erased early gains and fell into the negative. Also, the Shanghai Composite is losing altitude, currently down 0.80 percent. So far, the losses are moderate and have not really spooked US index futures traders. The S&P 500 futures are trading flatlined.
Looking ahead - The cross could regain 133.00 levels if the European equities begin the week on a positive note. Also, the upcoming Eurozone confidence, inflation, and German labor market report to highlight the strength of the region's largest economy, says Kathy Lien from BK Asset Management, but adds, " but they won't change the European Central Bank's monetary policy stance." However, the EUR could still find takers on positive data sets.
EUR/JPY Technical Levels
A solid rebound from the 100-day MA and a close above the 50-day MA on Friday is demoralizing for the bears. Still, the cross needs to clear 133.50 (resistance of trendline sloping from Oct. 26 low and Nov. 15 low) if it intends to revisit 134.49 (recent high). On the way higher, Nov. 15 high of 133.89 could offer resistance.
On the downside, breach of support at 132.68 (50-day MA) would open up downside towards 131.66 (Oct. 16 low) and 131.37 (100-day MA).