Waiting for the global stock market reaction to the weak employment
The EURJPY moved higher in trading after the US employment report, but did rotate back lower into the close. The pair might want to see what the global reaction in the stock markets might be. With a slower US employment picture for the month, will the buzz words center around the "relative safety of the JPY" cliché? In which case, we could see a rotation lower from here.
Technically, however, the "market" is playing it more safe with the pair moving between key support and resistance.
Looking at the 4 hour chart, on the topside there is resistance against a downward sloping trend line (see blue circles in the chart below) which cuts across at the 131.17 level (the high could only get to 130.958 on Friday). Above that are a string of recent highs that step from 131.40 to 131.50, to 131.61 and 131.856.
On the downside, the 50% of the last move lower comes in at the 120.947 level. Just below that level is the 200 hour MA (see green line in the chart below) which comes in at 129.889.
To further neutralize the market from a technical perspective, the 5 minute chart settled into the weekend between the 100 and 200 bar MAs (blue and green lines in the chart below). An early tell in the new trading week, will be off these lines. A break below the lower line (currently at 130.42) should solicit more selling, while a break above the 100 bar MA above (blue line) at 130.635, should solicit more buying.
In my mind, I am hearing the echoes of "the Yen pairs fell on the back of a flight into the relative safety of the JPY". What do you hear?
