EUR/JPY: unable to get through the 50-D SMA as risk sentiment rolls over

• EUR/JPY: turns over as stocks flipped on political concerns in Washington once again.
• EUR/JPY: eyes back to below the rising 50-hr SMA.

EUR/JPY has been tracking the performance of equities on Monday with a two-way street of traffic where equities rolled over after an initial rally. Currently, EUR/JPY is trading at 131.55, down 0.00% on the day, having posted a daily high at 131.63 and low at 131.45 while overnight, the cross made a high of 131.99 before dropping back to pierce the hourly 50-SMA at 131.41.

Equities started out well on signs that Trump may have softened his approach in a trade spat with China when he tweeted:

"President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!"

However, the mood flipped on Wall Street when a late hit from headlines that President Trump’s personal lawyer had been raided by the FBI. Looking aheda today, analysts at ANZ explained that "expectations are reasonably high that China’s President will re‑affirm Beijing’s ongoing commitment to reform and more open markets (while not being seen to overtly acquiesce to Washington’s demands)," the analysts explained. 

EUR/JPY levels

From a technical point of view, the 200-day ma at 132.13 has yet to be breached while the 50-D SMA was tested. These levels guard 132.43/47 as the March high and Fibonacci retracement. The February 21 highs at 133.05/09 would be the next upside target. To the downside, analysts at Commerzbank explained that below 128.96 would trigger a slide to the 127.27 August 2017 low and suggests scope for the 125.58/50% retracement of the move up from 2017.