EUR/JPY snaps two-day losing streak to pierce 120.00 amid risk reset
- EUR/JPY bounces off five-day low as risk-aversion takes a breather.
- Mixed catalysts concerning Coronavirus keep traders guessing.
- Trade sentiment continues the broad weakness.
EUR/JPY rises 0.20% to 120.07 during the pre-European session on Wednesday. In doing so, the pair bucks the previous two days’ declines amid a pullback in trade sentiment.
The coronavirus (COVID-19) outbreak in Europe has recently grabbed major attention. The latest numbers from Italy suggest 323 confirmed cases including 11 deaths as of 12 AM February 26 local time.
Even so, the US 10-year treasury yields recover four basis points (bps) from the record low, tested yesterday, to 1.374% whereas S&P 500 Futures registers 0.60% gains to 3,151 by the press time.
The reason could be found in the soft numbers from China as well as claims that Singapore is advancing in research concerning the epidemic.
China marked another day of declines in the new deaths due to the virus outbreak on February 25 to 52 versus 71 flashed the previous day. Further, following Global Times doubts over Chinese claim to have found the cure to the deadly virus, Bloomberg recently came out with the news that Singapore researchers advance in the study of coronavirus.
Markets are now awaiting fresh clues for the deadly coronavirus outbreak inside Europe and how policymakers react to the same in order to determine the near-term moves. It should also be noted that the European Union (EU) has recently presented its plan of post-Brexit discussion with the UK which portrays strained relations between the earlier neighbors.
Technical Analysis
An upside break of 21-day EMA level of 120.20 propels the quote towards 200-day EMA surrounding 121.22, until then the pair bears the risk of revisiting 119.25 and the recent lows near 118.50.