Intermarket EUR/JPY: bears riding the risk-off and worst daily losses on Wall Street since October 2016

Currently, EUR/JPY is trading at 121.48, down -1.35% on the day, having posted a daily high at 123.17 and low at 121.44.

Yen outperforming in mild risk-off - Scotiabank

Watch the VIX

EUR/JPY has been falling in extreme risk-off as Trump's policies are challenged and concerns mount over the EU's politics with French and dutch elections coming up. The CBOE Volatility Index VIX, +17.77% that is used to measure Wall Street expectations for large swings in the S&P 500 SPX, -0.91% was up about 18%, to 12.52 earlier and was the sharpest jump for the gauge of market anxiety since September 9th, according to FactSet data, while the Dow and the S&P 500 index are on track to post their worst daily loss since mid-October.

Risk-off on Trump policies 

Trump has been very active at the start of his presidency, and while some of his policies are seen as positive for US business, the latest developments over the weekend in banning travel and entry to US borders for some countries is highly controversial and is being challenged by various courts and jurisdictions, throwing is authority into the wind and thus making for plenty of uncertainty in markets and reinforces growing worries about investing in the United States. 

The cross is back to key support where EUR/JPY last week bounced off cloud support at 121.66 and the 55 day ma at 121.55 today.  Failure here would allow slippage to the 120.55 January low and Fibo support at 119.70, where analysts at Commerzbank said they would expect it to again attempt to stabilise. "Slightly longer term we would allow for gains to extend towards the 128.61/200 month ma."

EUR/JPY levels

With spot trading at 121.51, we can see next resistance ahead at 121.56 (Weekly Low), 121.68 (Daily Classic S2), 121.74 (Weekly Classic S1), 122.09 (Daily 20 SMA) and 122.10 (Hourly 200 SMA). Support below can be found at 121.44 (Daily Low), 121.22 (Daily Classic S3), 120.60 (Monthly Low), 120.60 (YTD Low) and 120.33 (Weekly Classic S2).