EUR/JPY appears able to bust out of a good consolidation!
Will immediately’s market themes encourage a short-term bearish reversal for the pair?
In case you missed it, authorities bonds (and different threat property, for that matter) have NOT been having a great week since Fitch downgraded the U.S. sovereign credit score grade from AAA to AA+.
It doesn’t assist the euro that the Eurozone has been printing blended PMIs whereas headline inflation estimate within the area helps much less fee hikes for the European Central Financial institution (ECB).
EUR/JPY 15-min Foreign exchange Chart by TV
The Financial institution of Japan (BOJ) isn’t shrugging off its rising bond yields, although!
Earlier immediately, the central financial institution introduced one other unscheduled bond-buying operation after its benchmark 10-year notice hit a recent nine-year excessive of 0.65%.
Whereas the intervention could assist restrict JPY’s features, the transfer additionally lowkey highlighted the BOJ’s attentiveness to market costs in addition to the yen’s protected haven standing.
That is in all probability why EUR/JPY is flirting with the underside of a short-term consolidation close to 156.25. Primarily based on the lengthy pink candlesticks within the 15-minute timeframe, it’s doable that we’ll see one other spherical of threat aversion in the course of the European session.
It could additionally assist EUR/JPY bears that the 100 SMA has made a bearish crossover towards the 200 SMA.
If the bearish momentum initially of the European session carries over to the U.S. session, then EUR/JPY may discover sufficient sellers to interrupt beneath the S1 (156.12) Pivot Level stage and head for the S2 (155.56) assist space.
Not too certain about EUR/JPY breaking a variety on its first strive? You can even wager on some threat or profit-taking that might push EUR/JPY again to the 156.80 Pivot Level and mid-range line earlier than EUR/JPY sees sufficient promoting stress to make new weekly lows.
What do you suppose? Is EUR/JPY prepared for a bearish reversal?
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