EUR/JPY: risk on, Yen retreats

14.05.2019 / 20:23

Rating:

Since the flash crash occurred on January 2, 2019, the crosses against the yen are moving away, with no clear trend conditions here. The price of the EUR/JPY moved for some time between 127.265 and 123.422, but due to last week's stock sell - off, the yen gained momentum, resulting in a fall below the 23.6 Fibonacci area and exit from the narrow range.

The run-away gap of 05.05.2019 confirmed only the bear's control, as it is not yet covered. For the time being, the price is trying to find support on the diagonal line, as the risk sentiment definitely helps. If the euro remains strong and the yen continues to weaken due to improved market sentiment, we expect a rise to 123,382 again and an attack on the 124,438 levels to cover the gap. When executing this scenario, we expect the price to meet heavy resistance on that level.

Alternatively, if the sentiment remains negative, the currency pair will continue to move down, breaking through the support, spoiling the initial bullish scenario.

Trader Martin Nikolov

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EUR/JPY: risk on, Yen retreats

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