- EUR/JPY is currently trading at 121.31, travelling between a tight range of 121.19 and 121.48.
- EUR/JPY is basing on a technical basis albeit pressured by a series of lower tops.
EUR/JPY has been under pressure since July 11th but has made a series of higher lows in the near term. Risk appetite is slightly lower today as markets weigh up the outlook in what appears to b a new easing cycle at the central banks, with much-depending on this month Federal Reserve outcome.
Stocks have been in consolidation this week but today’s European stock indices have closed lower with the German DAX, -0.72%. As for data, the soft European June car sales figures highlighted the downside risk to the eurozone growth outlook, particularly in light of the openness of the eurozone economy and its exposure to car exports.
Analysts at Commerzbank explained that EUR/JPY has started to erode the 2019 uptrend line at 121.42 and the 120.79 June low, is exposed:
“A negative bias will remain entrenched while we are below the 55-day moving average and the 3-month downtrend at 122.34/42. It should head to the 119.91 78.6% Fibonacci retracement. This is the last defence for the 117.85 January spike low. Resistance is offered initially by the 55-day ma and downtrend at 122.34/42 and then 123.34/75 May 21, June and current July highs.”