EUR/JPY - Bearish follow through despite upside break of falling channel

EUR/JPY pair witnessed an upside break of the falling channel pattern only to fade spike to 130.70 levels in the Asian session today. Currently, the cross is down 0.20% at 130.20. 

The bid tone around the EUR strengthened on Friday after President Draghi refrained from jawboning the EUR and instead cheered the global economic recovery during his Jackson Hole speech. The cross witnessed a bullish falling channel breakout, however, the follow through is anything but encouraging. 

Yen bid on risk-off mood

The S&P 500 futures are currently down 4 points or 0.20%. Australia’s ASX 200 is down 0.75% or 43 points, while the stocks in New Zealand are down 0.25%. South Korea’s Kospi has shed is down 11 points r 0.48%. 

The mood is clearly risk-off this Monday and that works for the Japanese Yen. The data calendar is light today; hence the focus remains on the equity markets. Worsening of the risk-off mood in Europe/US could see the current negative move in the EUR/JPY gather pace. 

EUR/JPY Technical Levels

A break below 130.00 [zero figure] would open doors for 129.55 [falling channel hurdle now acting as support] and 129.45 [5-DMA]. On the higher side, breach of hurdle at 130.44 [Fri’s high] would open up upside towards 130.71 [session high] and 131.00 [zero levels].