The EUR/JPY ended the 12-hour trading range of 130.56-131.00 with a downside break and extended losses to 130.32 – the lowest level since March 5. What are the fears of the markets? Learn this from the 16 March EURJPY Technical Analysis.
16 March, GKFX – The common currency finds no love on fears that the European Central Bank (ECB) will delay the exit from stimulus amid rising global trade woes. This is evident from the drop in the Eurozone bond yields to their lowest level since late January.
Also, the spread between the 10-year German and Japanese bond yield narrowed to 72 basis points yesterday – the lowest level since March 1.
Focus on stocks
Meanwhile, the nervousness in the stock markets continues to bode well for the Japanese Yen. Ahead in the day, the cross will likely take cues from the bond yield spread and may drop below 130.56 if the equities turn risk-averse.
The final Eurozone CPI reading for February is unlikely to have a big impact on the common currency unless there is significant upward/downward revision to preliminary figures.
16 March EURJPY Technical Analysis
A clear break below 130.56 (lower end of the 12-hour trading range) has opened doors for a re-test of 130.00 (psychological level). Further losses towards 129.35 (March 5 low) cannot be ruled out as the relative strength index (RSI) has regained bearish bias.
On the higher side, a clean break above 131.00 (upper end of the 12-hour trading range) would expose the 10-day MA located at 131.24 and the descending 21-day MA stationed at 131.33.
This article 16 March EURJPY Technical Analysis was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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