- EUR/JPY Trades near 126.20 dollars.
- News of Japan PM Abe resigning soon worries risk mood.
- 21-HMA renders support to EUR/JPY.
EUR/JPY fell by 70 pips from early highs after news came in that Japanese Prime Minister Shinzo Abe is set to resign due to his health problems.
The resignation news pushed the Japanese equities into negative territory and saw its currency gaining ground as a haven-linked asset. The Nikkei 225 index closed 1.40 Percent lower; USD/JPY was down to 106.30 after falling off from just below the 107.00 mark.
The EUR/JPY sell-off was triggered after it faced rejection at 126.78 dollars – a rising trendline resistance. The pair fell to a low of 126.03 dollars, but quickly regained some ground to touch 126.20 dollars – and is currently trading around the level.
The pair held above the critical support region around the critical 21-hourly Simple Moving Average – now near 125.96 dollars.
A successful push by the bears past this support will bring the next support level at 50-hour moving average 125.66 dollars into play. A fall from there means the bears will target the confluence of the 100 and 200-HMAs at 125.50 dollars.
The bulls, on the other hand, will have to push the recoveries above 126.50 dollars, warding off fresh supplies in that region. Above this psychological level, the rising trendline resistance around 126.78 will again assume importance.
The hourly RSI is flat with a slight uppishness, indicating that all is not lost for the bulls.