JPY bulls are in no mood to relax amid fresh oil-driven risk-off in the equities and are now eyeing psychological level of 125.00 in the EUR/JPY cross.
Three-day losing streak
Taking into account a 150-pip fall seen today, the cross has been on a three-day losing streak. JPY bulls are making their presence felt, trapping analysts who had called for a fresh wave of JPY driven carry trades last week, on the wrong side of the trade.
It was widely believed that Yen funded carry trades would resume as new fiscal year starts in Japan. However, the move has caught many by surprise and is partly due to risk aversion in the markets.
Ahead in the day, focus is on the US ISM non-manufacturing data and sentiment in the US stock markets.
EUR/JPY Technical Levels
Spot may challenge bids around psychological figure of 125.00. If it cuts through the same, pair may test 124.67 (Mar 22 low), which is followed by a major support at 124.00 levels. On the other hand, a break above 125.38 (Mar 24 low) would shift risk in favor of a re-test of 126.09 (Apr 14, 2015 low) and 126.84 (daily high).