The EUR/JPY failed to stop its previous early-session losses and dropped to an intra-day low around 123.990 level mainly due to the modest pullback in the global equity markets backed by the concerns of ever-increasing coronavirus cases and US-China worse relations, which underpinned the safe-haven Japanese yen and capped the gains in the currency pair. The currency pair did not give any major attention to mixed Japan’s Q1 GDP data. Japan’s first quarter (Q1) GDP confirmed a 0.6% QoQ and 2.2% annualized reductions during their latest release at the data front. The data also affirms the policymakers’ downward revision to FY2020 read GDP forecasts.
Apart from this, the ever-increasing coronavirus (COVID-19) cases continued to weigh on the investor’s confidence about the economic recovery and kept the trading market depressed, witnessed by the fresh leg down in the U.S. stocks futures. As per the latest reports, the number of cases globally almost crossed 17 million, while 4.4 million confirmed cases and more than 150,000 deaths toll in the U.S. individually.
Elsewhere, the Australian state of Victoria recorded 429 new coronavirus cases on the day, with 13 death recorded so far. There are currently 6,489 active coronavirus cases in Victoria. Among them, 416 are in hospital. Apart from Aussie, Tokyo reported 292 new coronavirus infections so far on the day. Considering the on-going rise of virus cases in Australia, the Victorian Premier Daniel Andrews said that he would announce further restrictions on business, which would further fuel concerns over the recovery in oil demand. With an increased number of COVID19 cases worldwide, the Japanese yen is gaining bullish momentum amid boosted haven appeal.
With this, the EUR/JPY pair slipped below the upward trendline support level of 124.488 level. On the lower side, the EUR/JPY was expected to touch the support level of 123.845, but the pair formed a reversal candle before meeting the target. Therefore, we decided to close the sell trade to capture 35 pips in the EUR/JPY signal quickly. Brace for a new one now..
Entry Price – Sell 124.426
Stop Loss – 124.826
Take Profit – 124.026
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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