EUR/JPY: threatening a break below 131 on Cohn headlines

EUR/JPY is threatening a break below 131 the figure on yen strength after the headlines that President's economic advisor, Gary Cohn, will resign over differences about the recent decision that Trump wishes to implement on steel tariffs. Currently, EUR/JPY is trading at 131.02, down -0.54% on the day, having posted a daily high at 131.80 and low at 131.00.

Whitehouse Gary Cohn is planning to resign, risk off markets back in play

USD/JPY dumped on the news and the euro caught a bid, somewhat offering a buffer to the downside for the cross's bulls as we approach the Tokyo open today. Casing minds back to previous headlines that sparked up a price action frenzy, there were headlines that North Korea is willing to freeze its nuclear program in exchange for guarantees of safety for its communist regime. On the back of that, there came the EUR/JPY demand with shorts being covered on a spike in EUR/USD to a new recovery high and the biggest gain in a month in the DE 10yr bond yields. EUR/USD highs are now at 1.2429.

Intermarket analyses

As for stocks, which the cross is positively correlated to, the DJIA late-morning dropped heavily on the back of declines in heavyweights Boeing Co., and UnitedHealth, although the index managed to pick up 9 points to close 24,884. However, the futures just fell 340 points on the Cohn headlines and the cross follows suit. 

EUR/JPY levels

On a break below 131.00, 130.50, 130.20, 129.80 and 129.35 guards a break down to the 127.27 August 2017 low. For the upside, analysts at Commerzbank explained that EUR/JPY there is tough resistance at 132.06 20 day ma. "It will need to regain here in order to alleviate immediate downside pressure and allow for a recovery to last week’s high at 132.18 as well as the high from the 21st February at 133.06 and the 55-day ma at 134.08."