- EUR / JPY reversed from highs above 128.50 to lows near 127.50 over the course of Wednesday’s session.
- The downward movement was in tandem with an increase in demand for safe havens as risk appetite deteriorated.
Appetite for safe-haven assets has rebounded in recent trading amid a deterioration in US (and global) stock market sentiment, the EUR/JPY It has been heading lower and appears to be on track to end the day with losses of around 0.5%. The first Omicron Covid-19 infection has been detected in the US and as the infection rate of the variant rises in South Africa, investors in US equities have apparently thrown in the towel. The S&P 500 is now down more than 0.5% on the day.
That has caused the yen to catch bids and the EUR / JPY to fall from the previous session’s highs above 128.50 to just above the weekly lows at 127.50. And the technical aspects don’t look too good. When it broke above 128.50 earlier in the session, the EUR / JPY appeared to find resistance in a long-term downtrend that has been limiting price action since early November. If it descends from the 127.50 support, the pair would fall to its lowest levels since February, which could open the door for a run down towards 125.00, the next significant support area.
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