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Tag: EURJPY

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EURJPY Price Failed To Touch The Previous Resistance Level

$EURJPY’s price at the beginning of the year was 126.046 and the price was able to reach the highest level at 134.083 in June 2021. A double bottom has been formed between the months of August and September of this year. This double bottom activated the rally of $EURJPY with the current price at 132.618, 350 pips less of the previous major resistance level at 137.545, which was last seen in February 2018. The highest price of $EURJPY in the last decade was at 149.838. The Euro seems to appreciate more against the yen since the lockdown. Nevertheless, Japan and many countries have vaccinated more than 50% of their population. 

In recent times, there has been an increase in the demand for labour and skill in Europe. This was as a result of the lockdown, as many foreign skilled people are relocating to Europe. Before the dip in August and September of this year, which resulted in a double bottom, RSI showed that the price has been overbought in May 2021. At the moment, the price is already overbought on the daily chart. This could lead to a possible reversal in price as a Doji was formed yesterday and today’s candlestick shows a bearish one. If the price closes with a bearish candlestick and the next few days close on a bearish note, the price might fall to 129.261.

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EURJPY, A Pair With A Double Bottom

The year 2020 was good for the EURJPY bulls after the price opened at $121.92 and closed at $126.11. . Taking a further look at $EURJPY, the first half of this year was full of higher highs and higher lows till June. The bears took charge of the EURJPY pair after the highest level in the year was reached on the 1st of June, at $134.09 when the price began the downward trend.  

The 4hr chart has shown multiple oversold positions, which could be an indication of a possible rally. There is a likelihood $EURJPY reaches $130.58 in the coming weeks as last week’s candlestick was bullish. A double bottom has been formed at $127.90 in the month of August and September. As the price is currently at $129.64, we should be seeing price movement towards the psychological level at $130.00 next week. News released shows Sweden producer price index surged in August by 1.8%; the Italian consumer confidence improved in September as of today.  These could be the reasons the EUR has been appreciating against the YEN.

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ON THE AIR with Futures with Ben Lichenstien

I ended the trading week this Friday morning on the TD Ameritrade Network talking as one of the guests on the Futures with Ben Lichenstein show. In light of the surprise resignation announcement of UK Prime Minister Theresa May hours before I went on, it isn’t any wonder that Ben and I discussed the Brexit, the implications of another prime minister resignation brought on by the Brexit, and what effects all of this will have on the forex markets.

We also talked about the rise of risk aversion in the markets and what that will mean for the U.S. dollar and Japanese yen as safe haven currencies. But the one safe haven that I did not mention this morning is the Swiss franc. Luckily, Dayo already wrote an analysis yesterday looking at the current trend in the $EURCHF. So read that and watch my interview below for an understanding of the new fundamental landscape in the forex markets heading into the summer trading months.

Lydia on TDA Network
Click the image to watch
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MARKET OUTLOOK ON EUR/JPY

Throughout july, the Japenese yen gained so much against the Euro in which a new support level was at 125.00. Assuming buyers resume activities, it could get a new resistance level at 128.00. There is a breakout already, which might also be a fake breakout.

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Europe Contagion Hits Japan

chart of Japan trade balance with EU

Europe hit Japan right where it hurts – in the wallet – for the first time in 38 years. We all know that Europe is hell bent on carrying out austerity-driven policies. That drop in exports above is vicious. The following recovery has been tepid at best. It looks like the recession that has gripped Europe since 2009 is spreading beyond its borders.

As its second largest trading partner, Japan needs European business to help inflate its economy. Decreasing trade, however, leads to decreasing price hikes which leads to more deflation which equals a strong yen. Currencies from low-inflation countries are always in favor with investors. With $USDJPY around 80.00 and the $EURJPY having traded to record lows, the BoJ has quite a fight on their hands as Europe only gets worse still.

But who cares? Interesting chart, nonetheless.

Source: Reuters

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