The EUR / JPY pair is said to be in a negative trend over the next week. In trading this weekend, citing Bloomberg, EUR / JPY closed to 117.33 or fell 0.08%. Monex Investindo Futures Faisyal analyst said next week the euro will tend to be more depressed. The reason he saw developments that occur now tends to be more favorable for the movement of the Japanese yen.
"In the coming week, in general, there will be a minimal release of economic data in either Japan or Europe. While the news of rising tensions between the United States (US) and China over the trade war will benefit the Japanese yen, "Faisyal told Kontan.co.id, Sunday (3/5).
Faisyal said that the tensions between the two countries were caused by several western countries that investigated cases related to the corona virus to China. In addition, the US also plans to continue implementing import tariffs from China as trade agreements are hampered by the corona virus.
"If tensions continue next week, demand for the Japanese yen will increase as a choice of safe haven currency assets. So this will benefit the movement of the yen, "added Faisyal.
Lockdown Plan for Some Countries
While related to the plan of several countries in the European Union to loosen lockdown policy, Faisyal assessed that the effect would still be limited. Because in general, the European Union economy is still depressed at least until the second quarter of 2020.
However, Shinzo Abe will seek input from various parties before deciding to extend the emergency period in Japan to the second month or until 7 June 2020.
As we know, Japan has declared a state of emergency as of May 6, 2020. About the continuation of this policy, Shinzo Abe said he would ask the opinions of various experts to determine various data and make a final decision.
The weakening of the EUR / JPY pair is also seen in technical movements. Faisyal said that currently, the price of EUR / JPY is moving below the moving average (MA) of 50,100, 200. Then the MACD indicator shows minus 0.9072 and the RSI and stochastic indicators are respectively at 43.59 and 20.59. This indicates the trend of the pair is down for this week.
"Support levels are in the area of 116.00 and 114.70 while the resistance is in the area of 119.05 and 121.40. Therefore, I recommend to sell on a rally with current conditions, "concluded Faisyal.
Yen Strengthens Against Some Currencies
The yen strengthened against the euro and also rose against the US dollar on Wednesday (05/06) morning after a court decision challenging Germany's participation in the European stimulus program and fears of a global economic recovery left investors nervous. At 09.15 WIB citing Investing.com data, EUR / JPY weakened 0.23% to 115.22 and USD / JPY weakened 0.25% at 106.32.
While the USD / IDR rupiah edged down 0.09% at 15,093.0 against the US dollar. Launch Reuters on Wednesday (05/05) morning, Germany's highest court on Tuesday (05/05) yesterday gave three months for the European Central Bank (ECB) to improve its bond purchase program.
Or the German central bank Bundesbank will not participate in the scheme which aims to reduce the economic impact of COVID-19. The news put pressure on the euro to date and continues to push the yen higher. AUD / JPY also fell 0.22% to 68.39 and NZD / JPY weakened 0.17% at 64.39 at 09.25 WIB.
AUD / USD edged up 0.07% at 0.6435 and NZD / USD strengthened 0.12% to 0.6057.The German court's decision may not actually frustrate the European stimulus program because the European Central Bank (ECB) is likely to be able to provide the necessary justification for its bond purchase.
