- Euro under pressure, yen soars on risk aversion.
- The Dow Jones plunges 2.60% and US yields hit multi-year highs.
- EUR/JPY drops almost 500 pips in three days.
The fall of EUR/JPY from multi-year highs it accelerated on Monday and fell below 140.00. From the highs of last week, it has dropped 500 pips
Pullback points to more losses
EUR/JPY is trading around 139.48, the lowest level in ten days. It is falling for the third day in a row, making a sharp pullback that started last week from levels above 144.00.
The cross remains below 140.00, a relevant support zone. A daily close below the next key support at 139.00/10 should open the door for more losses, targeting 138.40, the 20-day SMA.
The EUR/JPY decline comes amid risk aversion and despite rising US yields. The Yen is one of the best performing stocks, unaffected by the fact that yields at 10 years in the US reaches the highest level in a decade, above 3.30%.
On Wall Street, the Dow Jones falls 2.80% and the S&P 500 3.79%. Markets appear to be in panic mode at the start of the Fed’s week. Concerns about the global economic outlook and monetary tightening around the world are weighing on investors. The central bank is seen raising rates by 50 basis points, although after Friday’s CPI data some analysts believe it could raise rates by 75 basis points.
Technical levels
Source: Fx Street
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