- The yen recovers, stocks trim gains.
- EUR / JPY rejected above 124.00 falls below 123.70.
The EUR / JPY is volatile trading and has just dropped to the lowest level since November 9 at 123.62. The cross remains in the area of the lows with the bearish tone. It had previously climbed to 124.44, the highest since Thursday.
The jump in EUR / JPY was hit when the news broke that Moderna’s tests for the coronavirus vaccine showed an effectiveness of 94.5%. This sent stocks and USD / JPY up strongly. After the opening of Wall Street, the stock markets began to cut gains and the USD / JPY erased all the gains going from levels above 105.00 to the area of 104.50.
The yen’s recovery pushed the EUR / JPY down. Furthermore, the other negative factor is that the EUR / USD remained stable, validating modest daily losses. This implies that the decline in USD / JPY was due to the strength of the yen.
From a technical point of view, the bias is bearish in the short term. A confirmation of the EUR / JPY above 124.50 would change this, exposing the strong resistance at 125.00. On the downside, the next supports are seen at 123.40 and 123.00.
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