- The US Secretary of the Treasury Steven Mnuchin said that the trade war between the US and China was “put on hold” launching risk-on market sentiment.
- The EUR/JPY is threatening to break above the 131.00 handle.
The EUR/JPY is trading at around 130.90 up 0.4% on Monday as the US Dollar and the risk off mood dominates trading on holiday muted activity in Europe.
In Europe EUR/JPY found an intraday low at 150.48 then rose almost 40 pips and is now consolidating in the 130.98 region close to the 100-period simple moving average on the 4-hour time-frame.
The yen is considered a safe-haven currency in times of market turmoil and the recent comments by Steven Mnuchin, US Secretary of the Treasury, eased yen demand across the board.
"We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework," said Mnuchin over the weekend. "We came away with a very comprehensive framework agreement that needs to be implemented, but has lots of different aspects," he added on Monday.
The easing of trade war tensions between the US and China is seen as a positive for the global economy. Indeed, investors cheered the positive news and the major stock indices in Asia, Europe, and the US are ticking up on Monday’s trading.
On the other hand, investors are choosing to ignore the political situation in Italy where the two Eurosceptic parties, Five Star Movement and League are on track to form a government.
Banks will be closed in observance of Whit Monday in Europe and Canada therefore moves can be limited as there is less liquidity in the market.
EUR/JPY 4-hour chart
The market is trading above its 50 and 100-period simple moving averages (SMA) but below the 200-period SMA. The market is rather neutral with an upward momentum bias. Support is seen at 130.24 and 129.53 swing lows while resistances are seen at 131.14 swing high and at the 132.00 figure.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
AUD/USD rises to two-day high ahead of Aussie CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD holds above 1.0700 on weaker US Dollar, upbeat Eurozone PMI
EUR/USD holds above the 1.0700 psychological barrier during the early Asian session on Wednesday. The weaker-than-expected US PMI data for April drags the Greenback lower and creates a tailwind for the pair.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum ETF issuers not giving up fight, expert says as Grayscale files S3 prospectus
Ethereum exchange-traded funds theme gained steam after the landmark approval of multiple BTC ETFs in January. However, the campaign for approval of this investment alternative continues, with evidence of ongoing back and forth between prospective issuers and the US SEC.
Australia CPI Preview: Inflation set to remain above target as hopes of early interest-rate cuts fade
An Australian inflation update takes the spotlight this week ahead of critical United States macroeconomic data. The Australian Bureau of Statistics will release two different inflation gauges on Wednesday.