EUR/JPY’s Choppy Trading Continues – Bearish Channel in Play
Arslan Butt • 1 min read
The EUR/JPY currency pair continues to play in the market as it trades within 119.150 – 116.150. EUR/JPY disrupted the descending triangle to conclude candles below 118.700 resistance on the 4-hour timeframe. Most of the recovery in the pair was triggered in the wake of faded safe-haven appeal.
On the flip side, the greenback picked up a modest pullback after the bullish overnight rally and added to the selling bias around the pair. However, some uptick in the US Treasury bond yields will likely help limit deeper losses.
Whereas, the latest survey showed that 47% of Japanese firms convey disturbance to the supply chain due to the coronavirus outbreak. As as result, the 10-year US Treasury yields are 4-basis points higher at 1.044%, whereas Japan’s NIKKEI marks 1.7% gains to 17,330 by the press time.
Looking forward, traders will closely observe that the pair can put some bids or continue with its intraday pullback because the focus remains on any fresh developments surrounding the coronavirus saga due to absence of relevant economic releases. Increased demand for safe-haven assets may keep EUR/JPY bearish today.
Daily Support and Resistance
Pivot Point 106.23
Technically, EUR/JPY may find support around 116.225, and violation of this can extend the selling bias until 113. Whereas, the bullish breakout of 118.550 can lead the pair towards 120 and even higher. Since the RSI and EMA are both in favor of selling bias, we may look to open a sell trade below 118.600 to target 116.200.