- Euro under pressure, yen soars on risk aversion.
- Dow Jones tumbles 2.60%, US yields print multi-year highs.
- EUR/JPY drops almost 500 pips in three days.
The decline of EUR/JPY from multi-year highs gained speed on Monday and tumbled under 140.00. From last week highs, it has fallen 500 pips
Reversal points to more losses
The EUR/JPY is trading around at 139.48, the lowest level in ten days. It is falling for the third consecutive day, making a sharp reversal that started last week from levels above 144.00.
The cross is holding under 140.00, a relevant support area. A daily close below the next key support at 139.00/10 should open the doors to more losses, targeting 138.40, the 20-day simple moving average.
The slide in EUR/JPY takes place amid risk aversion and despite higher US yields. The yen is among the top performers unaffected by the fact that the US 10-year yield hits the highest level in a decade above 3.30%.
On Wall Street, the Dow Jones is falling by 2.80% and the S&P 500 drops 3.79%. Markets look in panic mode at the beginning of the Federal Reserve’s week. Concerns about the global economic outlook and monetary tightening across the globe weigh on investors. The central bank is seen raising rates by 50 bps, although after Friday’s CPI data some analysts consider it could raise by 75 bps.