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  • EUR/JPY: tracking global equity slump, DJIA down nearly 500 points as traders came back from a three-day weekend, greeted by fresh political drama in the EZ.
  • EUR/JPY: lowest in almost a year; yen catching the safe-haven bid and euro smashed out of the court on the fresh political drama.

EUR/JPY is currently trading towards the lowest levels since the summer of 2017 having scored that low in recent trade down at 124.61. Spot is oscillating around 125.15 at the time of writing having tumbled from the highs of 127.28 in early Asian trade yesterday as political deadlock in Italy plays on, with Spain’s own political strife joining in on the action as well; and not to mention increased trade war angst hitting the wires on Tuesday too.

EUR/JPY tends to track performances in the equity markets, and it is all one-way business today. The US benchmarks have followed on the coattails of a bloodbath in European markets as follows:

  • Italy’s FTSE MIB is down -2.65%
  • Portugal’s PSI20 is down -2.58%
  • German Dax is down -1.6%
  • France’s Cac is down -1.4%
  • UKs FTSE is down -1.2%
  • Spain’s Ibex is down -2.2%

US stocks hitting the skids too

At the time of writing, the S&P 500 is attempting to stablise off the lows at 2674.52 while the DJIA has made a low of 24,237.40, (down nearly 500 points as traders came back from a three-day weekend, greeted by fresh political drama in the EZ).

Investors are concerned that another Italian election looks likely within a few months,  fearing it could turn into a de facto referendum on the country’s membership in the euro. EUR/USD is down towards weekly S2 on the charts, -0.76% on the day so far at  1.1536, (low 1.1510). USD/JPY is lower as well, tracking stocks, with the yen picking up the safe haven flows and flows underpinned by fresh cold trade war hype as Trump sets dates for June for various tariffs on Chinese imports ahead of the next round of talks with Bejing due to take place as soon as this weekend.  

  • Trump has loaded up on fresh amo in the cold trade war on Tuesday

EUR/JPY levels

EUR/JPY is also well below the weekly S1 level at 125.92, (just above May 2017 high of 125.81) The next stop is the 124.08 December 2016 high. 126.20 is the monthly 21-SMA. 123.04 is where the 100-M SMA is located, just above the 122.50’s trend line support from May 2016 and April 2017 lows.