The EURJPY pair is at an interesting spot today, retesting the broken black support trend line as resistance at 127.792. The implication here is that a failure to break back higher will drive price to new lows. After falling below the 127.000 area on Wednesday price entered a barren zone on the chart where there was little in the way of support/resistance. After price fell through this zone it found support around 124.600 and rebounded higher to retest the trend line today once again rapidly moving through the barren zone. A move down to the low of this week could see price find some support along the way but with rallies being sold and the trend being to the downside it is likely that a push under 123.000 towards 122.557 is on the cards.
The price tumbled down last week when it rejected the moving averages around 131.000 with a loss of the blue trend line support at 129.750 sealing its faith. A recovery above 128.000 and a successful retest of the black trend line as support would encourage long positions. But ultimately the 131.000 area has to be overcome in order to have any chance of creating a higher high. Political instability and Trade Tariffs are creating turmoil in markets with the distinct chance that trend may be about to break.
The USDMXN pair was the first to react to news that the US was going to apply Trade Tariffs to the EU, Canada and Mexico. The pair has tested 20.03900 as resistance and pushed back down to 19.90000. A continuation of the trend would see a breakout higher towards 20.11760 followed by 20.27173. These levels are key lows from December 2016 and January 2017. The swing high from early 2017 is found at 20.53710.
A loss of 19.43914 would see a reversal of the trend down to the 19.14250 area and the 50 DMA. The 100 DMA is at 18.96338 with the 19.00000 level a key psychological level in between. A loss of this region would target supports at 18.66935 and 18.43770. There is a chance price could consolidate in this area and even reverse higher once again. A push down to support at 18.00000 would need to see buyers return to avoid a retest of long term trend line support at 17.77000.