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15 Apr 2013
Forex: EUR/JPY, stops below 127.70 tripped
FXstreet.com (Barcelona) - EUR/JPY is extending to the downside quite aggressively, currently breaking its previous trend high at 127.70 after a two hours of intense selling from 129.21 session high to now challenge a key structural junction on the trend.
In view of Sean Lee, founder at FXWW: "If it breaks 127.70 (happening as we write), we should see more trailing stops going off."
"As a local hedge fund just mentioned to me, once the big players start liquidating positions in one asset class, as they are currently doing in the Gold market, it can often lead to selling in other areas (ie liquidating Yen shorts)" Sean adds.
Looking at near term behaviour of the exchange rate (lowest today at 127.55), there is still room for the pair to fall until faced with 125.55/10 demand, as per the rally-base-rally from April 5 in American hours. On the upside, strong selling activity has been observed away from 128.30/50 box, suggesting that such imbalance must have left yet unfilled sell orders on a potential return.
In view of Sean Lee, founder at FXWW: "If it breaks 127.70 (happening as we write), we should see more trailing stops going off."
"As a local hedge fund just mentioned to me, once the big players start liquidating positions in one asset class, as they are currently doing in the Gold market, it can often lead to selling in other areas (ie liquidating Yen shorts)" Sean adds.
Looking at near term behaviour of the exchange rate (lowest today at 127.55), there is still room for the pair to fall until faced with 125.55/10 demand, as per the rally-base-rally from April 5 in American hours. On the upside, strong selling activity has been observed away from 128.30/50 box, suggesting that such imbalance must have left yet unfilled sell orders on a potential return.