Are traders done buying safe havens for now?
EUR/JPY is finding some support after opening the week with a bearish gap.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Over the weekend, militant group Hamas launched a surprise attack from Gaza on southern communities in Israel. The attack, as well as Israel’s retaliatory measures, have so far affected thousands of militants and civilians.
Japan’s markets out on bank holiday
Germany’s industrial production contracted for the 4th consecutive month in August, down by 0.2% (vs. -0.1% expected, -0.6% previous)
Sentix Eurozone investor confidence slipped from -21.5 to -21.9 (vs. -24.0 expected) in October
Crude oil prices surged after Hamas’s surprise attack on Israel raised fears of a wider conflict
Price Action News
There were no top-tier economic reports scheduled during the Asian session but risk assets like the Australian dollar did start the trading day on a weak note as traders priced in the armed conflict in Israel over the weekend.
AUD retraced some of its losses until the Asian session opened when the comdoll was sold across the board again.
The Australian dollar consolidated near its weekly lows but it looks like European session traders may be slowly buying up the comdoll again.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. and Canada’s markets out on bank holidays
FOMC member Lorie Logan to give a speech at 1:00 pm GMT
U.K.’s BRC retail sales monitor at 11:01 pm GMT
Japan’s current account at 11:50 pm GMT
Australia’s NAB business confidence at 12:30 am GMT (Oct 10)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
EUR/JPY looks like it has found short-term support after starting the week by gapping lower.
And why not? As you can see, EUR/JPY found buyers around the 15-minute chart’s 200 SMA and S1 (156.88) Pivot Point level. It also doesn’t hurt that the 156.80 – 157.00 zone has served as support for most of September.
Is EUR/JPY ready to extend an uptrend that started last week?
Aside from the U.S. and Canadian markets out on bank holidays, we’re also not seeing top-tier economic releases in the next trading sessions. This means that we’ll likely see more risk sentiment-related moves until a fresh catalyst comes along.
If EUR/JPY sustains its momentum above 157.00, then you can eye the 157.60 Pivot Point line that also marks today’s highs. You can even consider the 158.00 psychological level if there’s widespread JPY selling during the U.S. session!
In the more likely event that traders sell the euro or buy more safe-haven yen in the next trading sessions, you can consider the support levels we’re eyeing and short the pair on a clear downside breakout. Just make sure that you’re seeing bearish candlesticks and that there’s potential momentum in your breakout!
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