Major Resistance on EUR/JPY
This week, it looks like traders are now putting more weight on fast-growing covid case / hospital admissions than any fresh vaccine or stimulus news, meaning the yen could support the euro more if the overall environment turns negative.
Labels: Technical Analysis
If we see the ECB’s extended stimulus, the risk environment remains negative (or if there is a financial market risk), and fails to break the 127.00 handle, I take this as a brief signal of EUR / JPY.
If the ECB expands as expected, the euro rally will take place, but traders will likely set prices in the European recovery. If by then the risky environment changes to a positive one (e.g., based on the development of stimulus / positive epidemics), I will keep an eye on EUR / JPY for a break above 127.00 to go long.