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Forex: EUR/JPY returns to 125.00

After last week's high at 127.70, profit taking followed and moved the EUR/JPY down to 123.44 low. Today, the EUR trades stronger and the JPY weaker, allowing the cross to retrace some of the recent losses. The EUR/JPY returned to 125.00 (+0.87%).

About this Thursday's BoJ meeting, BofA Merryll Lynch analysts had written: “Shirakawa's early resignation means that the financial markets could form earlier expectations of policy change under the new leadership, reducing the risk of market disappointment if the Bank does nothing at next week's meeting”.

The EUR/JPY is downside corrective and Commerzbank analysts' attention remains on the 6 week uptrend at 121.46 and the 3 month uptrend at 119.15: “We look for these to hold the downside and provoke recovery. Near term rallies should ideally remain capped by the 127.71 6th February high and 127.93 the April 2010 high for this downside corrective phase to be maintained”, wrote analyst Karen Jones.

Forex Flash: Gilts operating in range that suggests upside bias – RBS

According to Technical Markets Strategist Dmytro Bondar at RBS, “Gilts have stayed in a range between 20-day MA and 115.75 support level, while a range breakout will be likely to determine further direction. There are no strong direction signals from the chart. However, as cross-market signals suggest, there is more likelihood of an upside breakout, which means a break of the 20-day moving average. As it was the main limiting factor for the market, a push higher would be likely to trigger a strong move to 117.20 onto possibly 117.78. Alternatively, a downside break would be a signal for a move to 115.67/51.”
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Lack of conviction prevails around the euro

The single currency seems to have left behind its post-Draghi depression, finding a bottom in the area around the mid 1.33s and is now looking to extend a bull attempt beyond the key resistance at 1.3400 ...
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