EUR/JPY: Drops to 28-month low and pops amid escalating US-China trade tensions

EUR/JPY is currently trading at 117.05, representing little change on the day, having hit a low of 116.56 earlier today. That was the lowest level sin  |  26/08/2019 01:36
  • EUR/JPY gapped lower to hit a 24-month low of 116.56 on rising US-China trade tensions.
  • Oversold conditions and the recovery in the S&P 500 futures likely helped EUR/JPY recover losses.

EUR/JPY is currently trading at 117.05, representing little change on the day, having hit a low of 116.56 earlier today. That was the lowest level since April 2017.

Trade tensions put a bid under JPY

The drop to 28-month lows could be associated with the escalating US-China trade tensions and the resulting rise in demand for the haven currencies like the Japanese Yen.

On Friday, US President Donald Trump said that starting on Oct. 1, the US will increase the levy on $250 billion worth of China's goods from 25% to 30% and impose a 15 % levy on the remaining $300 billion of goods, starting Sept. 1.

The Yen gapped higher in the early Asian session today with the futures on the S&P 500 flashing red.

Oversold conditions

The 14-day relative strength index fell to 26 earlier today, the lowest level since August 2019, meaning the pair was most oversold in 12 months.

That, coupled with the recovery in the S&P 500 futures may have helped EUR/JPY rise back above 117.00.

As of writing, the S&P 500 futures are reporting 0.84% losses at 2,831. The futures had dropped to a low of 2,81.5 in the early Asian session.

Looking forward, the pair may rise further toward to 117.50 if the S&P 500 futures erase losses and the German Ifo surveys, which provide insight into the latest thinking of German executives, better estimates.

Pivot levels

 

Share

Popular News

Show More Popular News

Market Insight's Views

Market Insight analyses will provide both fundamental and technical comprehensions on FX
and other asset classes for Market Insight viewers

RISK WARNING

The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

  • ForexF
  • IndicesI
  • CommoditiesC
        Back

        Login to Market Insight Account

        Your Market Insight account gives you access to the tools that we offer our customers including our
        Technical Studies & Sentiment for your accounts.

        Forgot Password?

        Don't you have a Market Insight account? With a few easy steps you can easily register to Market Insight

        Create a Market Insight's Account

        Your Market Insight account gives you access to the tools that we offer our customers including our Technical Studies & Sentiment for your accounts.

        register_ty

        Thank you!

        Welcome to Market Insight family!

        You have succesfully completed the registration.
        We will send you an e-mail to give you some
        instructions and our Terms and Conditions!
        Our account representatives will be contacting you as
        soon as possible. If you have any further questions
        please do not hesitate to mail us via info@marketinsight.com