EUR/JPY: recovering ground as risk-off dissipates

Currently, EUR/JPY is trading at 118.54, up 0.29% on the day, having posted a daily high at 118.82 and low at 118.02.

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EUR/JPY continued with the recovery as risk-off markets dissipated ahead of today's key event being the FOMC minutes. at the start of the week, the cross was pressured with risk aversion taking hold and the yen playing out the safe haven status while stocks plummeted. We have seen a recovery on Wall Street and USD/JPY has managed a strong bid back onto the 111 handle. "Measures of implied volatility remain low and risk reversals are pricing a relatively small premium for protection against JPY
strength," argued analysts at Scotiabank.

EUR/JPY levels

Analysts at Commerzbanj explained that EUR/JPY's near term outlook is neutral: "EUR/JPY has sold off to the 200 day ma at 117.75 and is attempting to stabilise just ahead of the 117.30 2016 to 2017 uptrend, which is expected to hold. Intraday rallies are indicated to struggle circa the short term downtrend at 120.20. Longer term outlook is neutral to positive: Offered short term and needs to stay above 117.23 the 2016-2017 uptrend for the longer term positive bias to be maintained. Where are we wrong near term? Above the 120.20 near term downtrend lies the 4 month resistance line at 122.52. Initial resistance lies at 121.84, the 21st March high".