Bond yields are higher as risk appetite surges amid reports say that North Korea is open to denuclearise if the regime’s safety is assured. How does this report impact EURJPY? Have a look at the North Korea Denuclearization EURJPY Impact Outlook, for more clues.
6 March, HotForex – Global stocks are in rally mode, with gains of 1.8% on Japan’s Nikkei and 1.1% on the German 30, while U.S. equity futures point to a sharply higher open too, on top of yesterday’s 1.37% surge. The North Korean news came from South Korean’s special envoy who met with Kim Jung Un.
The two Koreans have met with a “satisfactory” agreement, reported North Korea’s KCNA.
North Korea Denuclearization EURJPY Impact Outlook
USDJPY rallied from 105.90 to 106.42 highs following reports that North Korea would be willing to denuclearize if the regime’s safety was guaranteed, according to Bloomberg. The weakening of the yen appears to be counter-intuitive at first glance, given the geographic proximity, but given the currency’s safe-haven credentials, a lowering of geopolitical temperature has weighed on the JPY.
The yen is registering as the strongest currency on the day so far, showing a 0.2% versus the dollar and euro, although a little of its intra-day highs. The move is a partial correction of the across-the-board declines the Japanese currency saw yesterday, and comes amid market talk of Japanese repatriation as Japan’s fiscal year-end starts to loom.
EURJPY posted a high of 132.01, up from today’s low at 130.59, breaking with this move above the significant 200-DAY SMA. However, the pair has remained within the bounds of the downtrend that’s been developed since early February, and this is likely to continue if the pair fails to break the round level at 132.00, which complies with the 20-Day SMA.
Daily and 4-hour momentum indicators, despite the spike higher today, are still present a weak momentum. All .3 momentum indicators in a Daily basis remained in the negative territory, while the 4-hour timeframe, there are some mixed signals with MACD failing to cross to the positive area, Stochastic at 77 but sloping lower, and RSI at 64 looking higher.
EURJPY Technical Levels
Pair’s Resistance comes between the 20-DAY SMA and the 38.2 retracement Fibonacci level since the peak seen at February 2, at 132.00 – 132.45. Hence only a break and closing today above this area could trigger a bullish momentum and a possible retest of the 50 % Fibonacci retracement level at 133.45.
Oppositely, a bounce back today below the 131.00 level, confirms the continuation of the bearish movement.
Notable is the fact that the yen hasn’t been much affected by a concentrated batch of dovish BoJ speak this week, which have had the effect of walking back remarks by governor Kuroda last Friday when he said that an exit from monetary stimulus may happen “around” fiscal 2019.
This article about North Korea Denuclearization EURJPY Impact Outlook was written by Andria Pichidi, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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