The Euro (EUR) accelerated its decline against a strong Japanese Yen (JPY), which has rallied across the board on Thursday, without any clear reason to explain the move.
The EUR/JPY pair has found support at the 183.75 area, after a knee-jerk reaction from Tuesday’s highs at 185.86, with momentum indicators on intraday charts showing strong bearish momentum
The Yen saw a sudden spike during Thursday’s early European session, which raised speculation that Japanese authorities stepped in to support the JPY, which had fallen to 40-year lows against the US Dollar earlier this week. Yen’s unexpected recovery has put investors on edge, fearing further interventions on Friday, as the lower trading volumes amid the July 4 holiday in the US might provide an optimal chance to optimise the impact of these actions. Asked about the Yen’s move, both the Japanese Finance Minister Satsuki Katayama and Japan’s top currency diplomat, Atsushi Mimura, have declined to make any comment.
Japan has never confirmed any earlier interventions. Technical Analysis: Euro seems to have significant support at 183.75 EUR/JPY trades at 184.17, after bouncing from the 78.6% Fibonacci retracement of the late-June rally. Momentum indicators, however, highlight a strong bearish bias, with the four-hour Relative Strength Index (14) hovering near 37, while the Moving Average Convergence Divergence (MACD) indicator holds in negative territory.