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EUR/JPY clears 38.2% Fib hurdle on Xi inspired risk rally

4/11/2018, 10:14:44 AMTrading Strategies
EUR/JPY clears 38.2% Fib hurdle on Xi inspired risk rally

The risk assets have been buoyed by President Xi's conciliatory speech and de-escalation of US-China trade dispute.

The Dow Jones Industrial Average (DJIA) added more than 400 points on Tuesday, pushing the anti-risk Japanese Yen lower across the board. The EUR/JPY jumped to 132.62 - the highest level since Feb. 21 and closed well above 132.21 (38.2 percent Fibonacci retracement of Feb high-March low).

As of writing, the cross is trading at 132.35, representing a 0.10 percent drop on the day. The pullback from 132.62 to 132.30 (session low) could be associated with a 0.32 percent decline in the S&P 500 index.

The EUR/JPY will likely see a sustained move above the 134.00 mark if the Dow finds acceptance above the April 5 high of 24,622.

EUR/JPY Technical Levels

A break above 132.62 (previous day's high) would open up upside towards 133.02 (Jan. 11 low) and 132.22 (50 percent Fibonacci retracement of Feb high - March low). On the downside, a move below 132.14 (200-day MA) could yield a pullback to 131.85 (50-day MA) and 131.85 (ascending 5-day MA)