EURJPY continued to experience a gloomy moment for the week where it recorded a decline of over 1.5%. Negative market sentiment following the movement control order in Europe due to the continuous wave of Covid-19 clearly caused the increased demand of the safe haven currency JPY.
The Dovish statement by President Lagarde after the ECB policy meeting yesterday also had an impact on the Euro.
President Lagarde acknowledged that the economy had lost momentum faster than ECB expectations and inflation had stayed low due to low energy prices. She also stressed that market risk is now tilted downwards.
EURJPY tested the key support cluster levels yesterday. It tested the Fibonacci retracement level of 38.2% (122.20), after it broke the support level of 122.33, and tested the psychological level of 122.00. It is currently trading slightly 20 pips below this key level at 121.80 and is waiting for a new catalyst for the next move, following Eurozone GDP data.
If the 122.00 level remains breached and broken, the 200-DMA level at 121.13 is the nearest support followed by the 50% fibo retracement level at 120.70. Meanwhile, 123.00 is the nearest resistance level followed by 23.6% fibo retracement level at 124.06. The 50-DMA is slightly above 124.30. Although EURJPY recorded a big decline this week, it still has not reached the oversold level on the RSI-14.
By the last day of October trading, investors and traders will most likely make adjustments to their portfolios at the end of the London session. High volatility is expected by the end of London’s trading session today.
Click here to access the HotForex Economic Calendar
Tunku Ishak Al-Irsyad
Market Analyst
HF Educational Office – Malaysia
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
