Yen remains well bid on fears that the rising bond yields could derail the equity market rally. What else does 10 January EURJPY Technical Analysis disclose?
10 January, GKFX– EUR/JPY extended the three-day losing streak in Asia and hit an intraday low of 133.97 amid risk-off action in the stock markets.
- EUR/JPY extends three-day losing streak.
- Focus on risk sentiment.
- Technicals suggest the pair may have topped out.
The Yen remains well bid on fears that the rising bond yields (bear market in bonds) could derail the equity market rally. Asian equities are likely feeling the heat of an uptick in bond yields. As of writing, stocks in Australia and New Zealand are down at least 0.5 percent each. Also, major US index futures are down 0.10 percent.
The cross may extend the decline if the European equity markets turn risk-averse. A (possible) rise in the German yields may not put a bid under the Euro, given the focus is on the spike in the US 10-year yield.
10 January EURJPY Technical Analysis
Bearish reversal confirmed? – Friday’s bearish hammer and a negative follow through this week indicates the rally from the Dec. 15 low of 132.05 has ended. A close below 134.49 (Oct. 26 high) could be read as a bearish reversal.
On the downside, support is lined up at 133.36 (50-day MA), 132.70 (100-day MA) and 132.05 (Dec. 15 low).
On the higher side, resistance is seen at 134.56 (session high), 135.18 (5-day MA + 10-day MA) and 135.63 (Jan. 2 high).
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