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EUR/JPY bounces off from 131.13 3-week lows

FXstreet.com (Chicago) - EUR/JPY was able to strengthen after falling to three-week lows around the 131.13 zone prior to Tokyo’s opening. Extending the bearish channel and downward trendline from last September 18th, the pair consolidates a potential reversal.

EUR/JPY Technical Levels


Price action reveals speed downward trendlines that indicate steeper plunges printing 3-week lows ahead of Tokyo’s opening and the strengthening of a safe-haven currency on US shutdown and debt ceiling hard deadline approaching. Offered at 131.28, the pair navigates between the supports aligned at 131 (August 20th highs), 130.54 (August 30th highs) ahead of 129.82 (September 8th lows) and the resistances set at 131.43 (October 2nd lows), 131.83 (September 17th lows) followed by 132.22 (October 4th highs).

Flash: keep buying EUR/USD dips until US agreement in place - Rabobank

While it may be counter-intuitive to buy the Euro as a safe-haven currency at times of risk aversion, especially with the EZ crisis still playing out on the sidelines, according to Jane Foley, FX Strategist at Rabobank, "it must be remembered that the USD’ s credentials are soured by its persistent (if improving) twins deficit and dysfunctional political system and the yen is still associated with the most indebted county in the world." As such, and since Foley expects no ECB policy changes this year, the Rabobank Strategist is looking to buy EUR/USD on dips "until a US agreement is in place" Foley said.
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EUR/USD sees a modest bounce; still below Friday’s midpoint at 1.3584

The EUR/USD is trading rather counter-intuitively given the nonsense going on in Washington. It should be rallying further, right?
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