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EURJPY dropped below the RSI 30.00 level on the daily charts today sending a very bearish signal that more selling may due. The pair is caught in the crossroads of risk aversion as both yen and the euro feel the heavy weight of concern from investors.
On the yen side, lower US yields, lower US stocks and geopolitical rumblings in the Korean peninsula have investors on edge sending USDJPY below the key 110.00 level for the first in months. The break of this key support suggests that the pair may drift towards the 108.60 level in the coming days.
In the meantime on the euro side, the wild, unpredictable four-way election in France is creating waves of uncertainty about the final outcome and that tension could only increase if the populist candidate Marie Le Pen produces a strong showing in the first round. The EURUSD dipped to below 1.0600 and has hardly been able to stage a rally despite a very weak dollar environment.
All of these factors combine for a strong possibility of further downside in EURJPY which does not have any significant support until 115.00 and sees resistance above 117.50