EUR/JPY: risks toward the downside, 112.65 on the cards? - FXStreet

Valeria Bednarik, chief analyst at FXStreet explained that the Japanese yen held on to its recent strength against all of its major rivals, with little clues coming from stocks, as worldwide stocks closed mixed around their daily openings.

Key Quotes:

"Japan will release its July Consumer Confidence index this July, and the Minutes of the latest meeting early Wednesday, but most of the attention will focus on Abe's fiscal stimulus policies, expected to be unveiled sometime this week."

"The EUR/JPY pair edged modestly higher, ending the day around 114.25, still trading around the 38.2% retracement of the post-Brexit slump."

"Short term, the 1 hour chart shows that the price remains well below its 100 and 200 SMAs, whilst the technical indicators consolidate within bearish territory, maintaining the risk towards the downside.

In the 4 hours chart, the Momentum indicator lacks directional strength, but remains below its 100 level, while the RSI indicator has turned lower around 37, having barely corrected oversold readings, also supporting a bearish extension ahead.

A break below 113.70, however, is required to confirm such move that can extend down to the 112.65 price zone."