EUR/JPY moves back towards a test of the 100-hour moving average
This comes as yen pairs run into some light pressure as Asian equities slip a little into the close. The fact that USD/JPY has also broken below the two key hourly moving averages has helped in that regard too.
As for EUR/JPY, the pair now tracks lower after highs today failed to reclaim ground above the 129.50 area - where the 3 August highs stalled and the 38.2 retracement level sits.
The 100-hour MA (red line) is the next key test as a move below will re-establish a near-term bearish bias back in the pair. Beyond that, further support is only seen around 128.78 followed by Monday's low at 128.50.
For buyers, the 100-hour MA is a key area to make a stand. But with the near-term momentum also siding with sellers in USD/JPY, it's difficult to imagine the two heading in opposite directions for the time being when there is no other catalyst in the market.
Chinese stocks have appeared to stabilise near the bottom after earlier declines, but we'll now have to see how much of the risk-off and negative sentiment spills over to European and US equities later on in the day.
With little else grabbing the attention of the market today, this theme will be something to watch out for.
In the bigger picture:
Price appears to be moving towards a test of the 38.2 retracement level @ 128.85 again after Monday's attempt to move below it failed having encountered support from the 4 July low @ 128.50.
