EUR/JPY Rallies To New 6-Year High
XM Group | Nov 20, 2014 03:47AM ET
The yen continued its relentless slide, as dollar / yen took over 118 yen handle and euro / yen topped the 149 level; a respective 7-year and 6-year high. It appears that traders are dumping their yen exposure before the elections, which Prime Minister Abe is expected to win. Not even a better-than-expected Japanese trade balance for October was enough to convince traders to stop selling the yen. Exports grew much faster-than-expected in October, probably helped by the weaker yen. 120 in dollar / yen was increasingly cited as the next target.
EUR/JPY has been rallying strongly since the beginning of November and is targeting 153.56 – which is the 78.6% Fibonacci retracement of the 169.95 (2008 high) to 94.09 (2012 low) decline.
The decisive break above 61.8% Fibonacci level and a break above the daily Ichimoku cloud provided the impetus for the latest solid gains to levels last seen in 2008. The bullish market structure is expected to remain for weeks to come. The tenkan-sen and kijun-sen lines are positively aligned. Momentum is increasingly positive (based on the RSI), which is reinforcing the underlying upside bias. However there is some caution as it is currently in overbought territory. The stochastic is also in overbought territory.
To the downside the 61.8% Fibonacci level is seen as support (140.95) and below this the October 16 low at 134.13 is a good support level. A drop below this could shift the bias back to the downside.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.