EUR/USD & USD/JPY Market Updates
Analysis by FXRenew
We were stopped out of the second half of our EUR/USD short yesterday for a 205 pip gain at 1.3125, and the pair has been nothing shy of erratic since. Despite these sharp intraday rallies, however, we still see further downside potential. The pair is testing the backside of the bullish trendline on a daily chart that broke last Thursday as well as the 100-day moving average here at 1.3130. The bounces are taking place around 1.3030 where the neckline of the Head and Shoulders pattern lies. We remain bearish under 1.3200 where the 20-, 34- and 55-day MAs have now converged. Elsewhere, USD/JPY just broke to a new one-month low after the BOJ failed to scare yen buyers in its policy statement. We still think Japan has bigger plans for the yen, including a one-off devaluation, and perhaps would like to bait in some more long yen speculators before ripping USD/JPY higher. Overall, with Europe back from a 4-day weekend we expect to see some action today.