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EUR/JPY remains on the back foot for the second consecutive day as it takes rounds to the intraday low of 124.67, currently around 124.73, while heading into the European session on Monday.
During the last week, the pair failed to extend its north-run beyond the late-April 2019. The pullback activated on Friday gains support from bearish MACD to suggest further downside.
Even so, the quote needs to break an ascending trend line from July 10, at 124.70 now, to revisit July 29 top near 124.30.
Not only the late-July top but July 24 trough near 122.85 and 200-bar SMA level of 122.60 can also lure the sellers past-124.70.
Alternatively, 125.20 and the monthly top near 125.60 could entertain the intraday buyers during the pair’s fresh pullback moves. Though, any more upside past-125.60 will easily break 126.00 to challenge April 2019 top near 126.80.
The dollar is likely to remain weak until the US economy resumes stronger recovery. Resistance at 106.00 capped the USD/JPY rally after better than expected US payrolls provide respite for the greenback on Friday and remains strong, FXStreet’s analyst Joseph Trevisani reports.
“Markets will now have to decide if the July payrolls were the confirmation of a deepening slowdown, a normal deceleration from June’s torrid hiring pace or a one-month reflection of the already retiring Covid-19 surge in June and early July.”
“If US statistics point to a resumption of the pace in May and June then the dollar will soon adopt that energy and rally. Absent that improvement the greenback will continue to sag even though the recovery in Japan is likely to be even weaker and more questionable”.
“Resistance at 106 is the immediate consideration. If that holds there is limited support to 105.00 and little beneath. The area above 106, especially above 106.50 occupied trading for four months and is replete with resistance and then support lines.”
EUR/USD – 1.1791
Despite the single currency’s rise to a fresh 2-year peak at 1.1915 last Thursday, subsequent selloff to 1.1756 on usd’s broad-based strength in post-NFP trading on Friday suggests MT upmove has made a temporary top there and consolidation with downside bias remains for stronger retracement to 1.1722, however, support at 1.1697 should remain intact, yield rebound later this week.
On the upside, only above 1.1850 would indicate aforesaid pullback has ended instead and risk gain to 1.1890/00, then 1.1915 later.
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