I continue to maintain that EUR/USD is in a consolidation phase between 1.3550/1.3850 which I expect to eventually break higher (but that could be in 3 or 5 weeks time). EUR/JPY, as we’ve discussed in the comment section, is trying to form a top at 125.25 and that level is looking technically quite strong. EUR/GBP has turned sharply south over the last few sessions as longs get nervous and start bailing. Once that pair starts moving in one direction with a bit of momentum, who knows where it will stop.

Since stalling at 125.07 this morning in London, EUR/JPY has had the potential to form a double top with the prior high at 125.21. A break below the low between the two peaks which comes in at 123.24 is the trigger point. A break of that level implies a decline of roughly two-JPY to come, on a measured-move basis. Stops from short-term players lie just below the 123.80 level, traders report.

The S&P 500 has been down all day long but is showing a bit of life late in the US trading day. The index is down 0.1% at the moment after trading 0.7% lower early on.

EUR/JPY is staging a mild recovery as risk aversion eases a touch. Traders are taking heart in the fact that the White House attempted to sooth raw feelings by China rather than fight fire with fire.

EUR/JPY trades at 123.73, EUR/JPY at 1.3674 and USD/JPY at 0.9049.

Traders report that a Swiss bank has been executing a large sell order in EUR/USD for the bulk of the US session. They’ve sold about 1 yard of EUR/USD beginning around the 1.3720 level, we’re told. All done now, I’m guessing…

1.3620/25 is solid support for EUR/USD on further pullbacks. Offers are seen at 1.3700 on rebounds.

EUR/USD is just edging through the 1.3670 support level as I write, while EUR/JPY is pushing 123.90 support. Stops lie just beneath both levels.

With the euro on the defensive this morning amid risk aversion, the 123.90 level in EUR/JPY is coming into focus. That level was a strong cap on the way higher and should now provide a floor on pullbacks. Expect stops to cluster around the 123.75/80 area if it breaks.

EUR/JPY closed in NY at 124.50 and has been as high as 125.31 in ealy interbank trade. Stop loss hunting again in very thin Monday markets. EUR/USD is at 1.3780 and USD/JPY at 90.80. As the speculative positioning data last week showed us, many EUR/USD shorts had switched over to EUR/JPY and they are now getting chopped.

Good luck today.

Not much above 127.00, looks like.

Remember how we spent nine months range trading between 139.00 and 127.00? My guess is it will now be very difficult to retake the 127.00 area. If we do, you’d have to surmise that happy days are here again and risk assets will remain in heavy demand.

125.25 contained this morning’s rally and needs to be overcome within the next few days before momentum stalls and traders look to book profits. Seasonals remain a headwind for EUR/JPY with year-end Japanese repatriation expected to peak in the next week or so and Dai Ichi Life floating a huge IPO on the Tokyo exchange in early April.

A move back below the 123.90 area would be our signal that the EUR/JPY rally has come to an end.

US equity futures are firm with the S&P’s up 4.9 points. Traders will turn their fiocus to the opening of the cash markets to see if we get follow-through buying above the 1150 resistance level in the index.

EUR/JPY is consolidating gains just below the 125.23 resistance level. A break targets the 125.75/75 level followed by very heavy resistance toward 127.00/10.

EUR/JPY is soaring after the US retail sales data as the “risk-on” attitude dominates the thinking in early trade after upbeat US retail sales. The February highs at 125.23 are just ticks away; Stops lie above that level.

USD/JPY is making a run at 91.00, trading as high as 90.98 on EBS so far.

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