Choppy Trading in EUR/JPY - Downward Channel Plays! 

By Eaglefx On May 15, 2020 in Daily Market Analysis

Choppy Trading in EUR/JPY - Downward Channel Plays! 

The EUR/JPY currency pair is tossing in between profit and losses on Friday within a trading range of 115.450 - 116.410. Bullish crossover of 116.410 may lead the EUR/JPY pair towards 116.880 today. The demand for safe-haven assets such as JPY increased after Trump said that he was prepared to end its ties with China as anger for coronavirus spread and its impact on economies has raised. The U.S. has been accusing China of global virus spread and wanted to punish it, but it has not yet made a formal announcement. The U.S. administration has been suggesting many ideas about punishing China over the global spread of the virus due to its negligence. 

On Thursday, Trump said that he was very disappointed in China and could cut off its relationship with China. He added that it would benefit the U.S. economy at $500 Billion, so he was considering it. Sino-US relations have been under dispute for over 1.5 years due to trade-war. The Phase-one deal was signed between these two nations in order to make their relationship better in December. 

According to the signed agreement, China would buy $200 worth of U.S. farm products, and the U.S. would roll back tariffs in stages on Chinese goods. Lately, reports were coming about the Chinese advisors to cancel the phase-one deal and start renegotiation, which would be tilted towards China's side this time. Trump has already announced that he would not go for renegotiation this time. 

Support Resistance 

115.48     116.13

115.07     116.37

114.83     116.79

Pivot Point 115.72

The traders seem to do profit-taking in Japanese yen ahead of the weekend, which is why the EUR/JPY pair is signaling upward movement. The pair may find an immediate resistance around 116.035 ane bullish breakout of this level may extend buying trend until 116.850, while violation of this 116.850 resistance can lead EUR/JPY prices towards 117.900. Conversely, the support holds around 115.470, below which the EUR/JPY may drop until 114.470. Let's wait for the breakout before placing a trade.