EUR/JPY: recoveries capped but strong footing on delicate Yen

By FXStreet FXStreet (Guatemala) – EUR/JPY is subdued and tracking the price action in USD/JPY. Rallies are faded at the 50 and 20 hourly SMA’s.

EUR/JPY has found a robust footing on the upper end of the 134 handle and continues to make attempts on the 135 handle as risk sentiment is less negative with the Chinese stocks trimming earlier losses in Asia, from an open of -4.4% in the Shanghai Composite, but the SHCOMP was ending down only 0.2% by end of play and the Shenzhen Composite down 2%.

Equities in the Euro Stoxx 600 were up 0.2% near midday earlier in Europe and the S&P futures were pointing to a higher open, now up +17% with the index at a session high today after a positive outlook from the beige book that did not signal accelerating wage growth or inflationary concerns.

We have the ECB tomorrow analysts at Rabobank explained that, “Recent developments in China and some of the broader EM regions are likely to feature heavily in the discussions of the ECB Governing Council this week.” However, they concluded that Draghi is likely to stick to ‘jawboning’ rather than announcing any tangible measures at this stage.

EUR/JPY: bearish below 138.85/139.00

Karen …read more

Source:: FX Street