- Wall Street printing fresh highs on the tape, sending EUR/JPY lower.
- Dollar rallies across the board on higher US yields.
EUR/JPY has lost some ground, backing away from the 131.50 highs and is risking its footing on the 131 handle altogether as the dollar firms up in the NY session. EUR/USD dropped when the DXY rallied from a touch below 94.50 to session highs of 96.65. EUR/USD subsequently fell to a session low of 1.1652 from highs of 1.1724 traded at the start of the US shift. EUR/JPY is currently trading at 131.12, off from 131.50 but still way up from the lows down at 130.29
Investors have been somewhat complacent to the potential ramifications in China retaliating to Trump's fresh round of tariffs that will be implemented on the 24th of this month at 10%, scaling up to 25% in December. China came back with their retaliation tariffs on US Goods - These will be effective on 24 September, with rates ranging between 5 and 10% on $60b. The Chinese have also filed a complaint to WTO on the latest US tariff measures on $200Bln worth of Chinese goods – (RTRS).
Dollar fueling the downside in the crosses
Nevertheless, the DJIA continues to print fresh highs on the tape at 26313.20 so far and the S&P does as well, scoring a fresh high of 2912.13. USD/JPY, as a result, has moved up to 112.39, a new 9-week high, and there are little signs of the tables turning at the moment. US 1- year yields are fueling the dollar's rally, whereby they too have rallied up to 3.043%.
EUR/JPY levels
Analysts at Commerzbank explained the market faces resistance that extends up to 131.98:
"This is the location of the 55-week ma and the July high. While it is possible that this will provoke some profit taking, Elliott wave counts suggest that dips should now hold at circa 129.70/00. A move above the July high at 131.98 would re-target the 133.48 April peak. Below 127.85 would leave the market back on the defensive and suggest losses back to the 124.91 mid August low. Only if support at 124.91/62 were to give way, would the area between the December 2016 high and the June 2017 low at 124.09/122.40 be back on the plate."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains above 1.0700, as key US data loom
EUR/USD holds gains above 1.0700 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.