(MENAFN- DailyFX) Talking Points:
- Technical Strategy: Long-Term bullish, Short-Term mixed.
- EUR/JPY has finally put in a retracement after the run following French elections tallied +1,200 pips.
- If you're looking for trading ideas, . They're free and updated for Q1, 2017. If you're looking for ideas more short-term in nature, .
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Over the past four months, the Euro has been in the midst of a jaw-dropping run. As growth an inflation have begun to show a bit more consistently in Europe, investors have started to try to front-run what feels like an inevitable stimulus exit from the European Central Bank. With a key rate decision on the calendar for the first week of September, optimism remains high that the ECB will make that first move away from stimulus in the near-future, and this has kept the Euro driving-higher against most major currencies.
In mid-April, EUR/JPY gapped-higher after the first round of French elections resolved with a rather market-friendly outcome, and the pair hasn't really looked back. There is still un-filled gap from that move, but in the time since, EUR/JPY has rallied by more than 1,200 pips. Pullbacks in the bullish move have been scant: ; and more recently we've seen prices move-down to test a key support level at 128.52. This is a key level, as this is the 38.2% retracement of the ‘Abenomics' move in EUR/JPY, and this had helped to set support in the pair throughout mid-July before buyers were able to push-up to a fresh yearly high in EUR/JPY.
EUR/JPY Weekly: 38.2% Retracement of ‘Abenomics' Move Helped to Set Today's Low
Chart prepared by
Over the past couple of days, we've started to see a retracement in the move as driven by a couple of factors. . President Trump said that North Korea's nuclear threats would be met with ‘fire fury, and frankly, power the likes of which the world has never seen'. This hastened risk-off moves in equities markets, and the Japanese Yen saw a run of strength that drove EUR/JPY below prior swing support.
At this stage, the pair remains bullish and supported; and this can open the door for top-side approaches. On the chart below, we're looking at three support and resistance levels that can assist with trade planning around bullish continuation in EUR/JPY.
Chart prepared by
--- Written by James Stanley, Strategist for DailyFX.com
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