EUR/JPY downside still playing out

EUR/JPY downside still playing out
FXStreet (Guatemala) – EUR/JPY is currently trading at 134.52 with a high of 134.57 and a low of 134.33.

EUR/JPY was attempting a minor recovery from the lows scored overnight in the 134.30’s but supply and the broader bearish forces at the 135 psychological figure came in and took the pair back to the mid point of the 134 handle where it is seeking out support there currently.

EUR/JPY has been an indecisive offer during the last week of trading, drifting a steady decline but lacking conviction as with the greenbacks strong performance as markets turn back to risk-on while the Greek saga’s negotiations finally made traction in favour of a third bailout for Athens. Today, the Greek banks opened and Greece paid back the arrears to the IMF of circa 2bEUR.

EUR/JPY downside on continued uncertainty and euro’s funding roll

However, there is still a great deal to be resolved and although risks to global financial markets have been diminished significantly in the near term on the proposed outcome, there are still implications to the time that it may take to implement a third bailout and there are still variables to consider, such as whether the EU can all agree on the same package that is to be delivered to Greece and whether Greece can commit to the required reforms which are highly onerous on the economy which is already suffering, and such spending cuts as EUR4b may only add to the nations problems.

Meanwhile, the euro is better offered in a risk-on environment and is playing out the roll of a funding currency on the back of the EBC’s commitment to the QE programme while Yellen underpins the consensus that a rate hike is coming from the Fed this year. The Yen will be in supply on strong performances in the US economy but will garner traction on uncertainties around the Greek and EZ saga.

EUR/JPY remains sell on rallies below 135.40

Technically, the price action remains a fade of rallies with 135.20 coming in as initial key resistance ahead of 135.40. 135 contains the upside on rallies currently on today’s business. Targets to the downside remains as 133.80 and 133.10 key support ahead of 131.30 April highs.
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Source: FXStreet