A good illustration of FX market structure is on display today. EUR/USD is down sizably after teh announcement of the EU trade deal and this may be a 'buy the rumor, sell the news' kind of event. But, there's also the possibility that this is squaring up ahead of a really big week of drivers with FOMC, Core PCE and NFP all scheduled for later this week. But, there's also the sentiment argument, where a strong bullish move has taken hold of the Euro in the first half of the year as EUR/USD has jumped to fresh three-year highs.
And while USD/JPY is rallying up to the 148.00 level, displaying Yen-weakness, EUR/JPY is down on the daily with a show of JPY-strength. This highlights that the move in EUR/USD is likely driving that sell-off in EUR/JPY as EUR/JPY is currently working on a bearish engulfing candlestick on the daily. And this happens after last week showed overbought RSI on both the daily and weekly charts, with daily RSI diverging from price as EUR/JPY set a fresh yearly high shortly after the open this morning.
This shows that EUR/JPY is very much in-play this week with those US drivers, and there's also the Bank of Japan rate decision to consider. In EUR/JPY, there's possible support tests coming up, around the 170.47 and 170.93 Fibonacci levels, followed by the 170.00 big figure. - js
And while USD/JPY is rallying up to the 148.00 level, displaying Yen-weakness, EUR/JPY is down on the daily with a show of JPY-strength. This highlights that the move in EUR/USD is likely driving that sell-off in EUR/JPY as EUR/JPY is currently working on a bearish engulfing candlestick on the daily. And this happens after last week showed overbought RSI on both the daily and weekly charts, with daily RSI diverging from price as EUR/JPY set a fresh yearly high shortly after the open this morning.
This shows that EUR/JPY is very much in-play this week with those US drivers, and there's also the Bank of Japan rate decision to consider. In EUR/JPY, there's possible support tests coming up, around the 170.47 and 170.93 Fibonacci levels, followed by the 170.00 big figure. - js
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.