The euro is the laggard this week and the yen led the way

Author: Adam Button | Category: News

Risk aversion and spiking covid cases in Europe dog EUR/JPY

FX weekly performance
EUR/JPY is the worst-performer this week, falling all five days and breaking through the September low to the worst levels since July.

Looking at the chart, there's an ugly head-and-shoulders pattern shaping up.
EURJPY chart
The measured target is near 116.00.

How will be get there? You could certainly see it happening with a contested election but even a divided congress could do it.

Alternatively, a continued jump in covid cases in Europe and elsewhere would undermine the recovery and lead to a flight to the yen.

In short, there are more ways to envision this happening than not.

But be careful out there this week; I expect that far more fortunes will be lost than gained in the next seven days.

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