EUR/JPY Drops Below 123.00 to Lower End of Trading Range
The EUR/JPY
pair's downfall continues to gain momentum and has now dragged the pair
back below 124.00 handle towards the lower end of its recent trading
range.
Warning issued by G7 leaders to the Japanese authorities against
currency intervention has been the key supportive pillar for the
Japanese currency's strength on Monday. Moreover, global risk-off
sentiment continues to boost the safe-haven demand of the Japanese
currency and aggravated the JPY strength across the board.
Despite of today's sharp fall, the pair is yet to break through last
week's lows and thus remains intact within its recent trading range.
Hence, only a clear break-out of the recent trading range would provide
cues over the pair's near-term directional move.
Technical levels to watch
From current levels, traders would be eyeing last week's low level of
122.60 to extend some immediate support. Failure to hold recent trading
range support now seems to confirm resumption of the pair's medium-term
downward trajectory, initially towards multi-month lows support near
121.70-60 area and eventually towards its next major support near 119.00
round figure mark.
Conversely, a bounce from current support level and a subsequent move
above 123.40 intermediate resistance seems to confirm the pair's
near-term trading range, thus assisting the pair move back to the top
end of the trading range resistance near 124.00 handle.
