EUR/JPY: consolidates chop to test 200-D SMA
- EUR/JPY falling back to test territory below the 200-D SMA.
- EUR/JPY: capped as geopolitical concerns pipe up again in ME.
EUR/JPY has started to consolidate after a choppy drift to the downside 132.61where the 'Xi rally' topped out. Currently, EUR/JPY is trading at 132.13, up 0.04% on the day, having posted a daily high at 132.23 and low at 132.05.
Fundamental wrap: the drums of war, Russia/Trump/Syria, keep investors on their toes
The day overnight was dominated by geopolitical headlines where tensions in the Middle East were heightened with Iran vowing to retaliate for the recent attack on a military base in Syria, blaming Israel for the strike and Trump on a Twitter binge calling out various culprits and rustling the feathers of the Russians.
Geopolitical risks, two-way for the euro
Initially, the euro had been benefitting on the Russian fallout where both the dollar and the ruble were pressured. However, the dollar picked up a bid and the downside commenced along with a late slide in stocks and risk sentiment, supporting the yen.
Forex today: FOMC minutes overshadowed by geopolitical angst
EUR/JPY levels
The EUR/JPY has been capped at the end of a bullish recovery that commenced at the 3rd April lows down at 129.97 up to 132.61. On the correction, the cross is pressuring 132.17 area of potential support where the 20-D SMA falls in. The 50-D SMA is located just below there at 131.85.
"The recent low at 128.96 was accompanied by a large divergence of the daily RSI and we suspect that we have based there," analysts at Commerzbank argued, sighting that 132.43/47 as the current March high and Fibonacci retracement comes as a key resistance guarding the January low and February 21 highs at 133.05/09.