EUR/JPY stepping back from 135 handle resistance

FXStreet (Guatemala) – EUR/JPY is finding some resistance on the bull run now that Wall Street turned negative and counters against the positive set up from overnight bourses.

Yesterday’s Asian trade was very bullish, triggered by sentiment in Chinese and from Japanese officials promising efforts to stabilize their economies, with Abe announcing that they will lower the corporate tax rate by at least 3.3% next year and optimism in China was rife due to the Ministry of Finance vowed to strengthen fiscal policy, boost infrastructure spending and speed up reform of its tax system, both supporting a bull trend in the Nikkei that rallied and closed over 7.5%. Meanwhile, China’s Shanghai Composite also rallied and for the second day this week, and was up 2.4%. on the close. European stock markets also followed Asia’s lead, and the main indices were opening as high as 2.%.

However, Wall Street was another story in the end. The S&P 500 finished up -1.4% and futures are down 1.27% in early Asia on the back of the sell-off on mounting fears that a Fed hike could come as early as this month. Strong jobs openings reported in the JOLTS data accompanying the positive revisions in the Nonfarm Payrolls. The JOLTS printed 5.753m vs 5.288m expected and 5.322m previous.

EUR/JPY: downside levels

On a turnaround while the cross remains below 135.20/80 and 136 channel psychological resistance, EUR/JPY’s support comes at 134.95, 134.54 (200 hourly SMA), 134.03 (50 hourly SMA). Karen Jones, chief analyst at Commerzbank explained, on the downside, they target the 2013-2015 support line at 127.46 currently. “Initial support will be the 131.80 then 129.28 Fibonacci retracements of the move seen this year.”

EUR/JPY is finding some resistance on the bull run now that Wall Street turned negative and counters against the positive set up from overnight bourses.

(Market News Provided by FXstreet)