EURJPY Rebounding Quickly
EURJPY is seeing a strong rebound this week with price having rallied off the 125.13 lows back up to around 127.03 currently. With no sign of the violence in Ukraine having intensified in the last 48 hours, including reports that the Russian assault has run into difficulties, we are seeing a clear relief rally across risk assets, leading safe-havens lower.
EURJPY is now approaching an important technical area, however. Price is fast approaching the retest of the broken bear channel, with a huge resistance area above between 127.74-128.36, where we had a big ledge of prior supports over the last year. This will be a key area for the pair and, given the downside risks which remain around the crisis in Ukraine, I will be monitoring the area for short signals should we see any reversal patterns set up.
Keep An Eye On
The conflict in Ukraine remains the key issue to monitor here. If Russia launches a fresh escalation of violence we can expect the current dynamic to reverse and safe-havens to take centre stage once again. However, if the current reduction in violence continues, if there are further peace talks, this will likely help EUR stay bid.
Additionally, we have the March ECB meeting tomorrow. On the back of the hawkish shift in January, the March meeting would have likely seen an expansion on this tone. However, given the fresh crisis, the ECB is likely to strike a reserved tone. Traders will be keen to see the extent to which the central bank judges the risks stemming from the crisis, particularly the impact on energy prices and inflation.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.