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EUR/JPY could turn very bearish on Greece


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FXStreet (Guatemala) – EUR/JPY is currently trading at 139.53 with a high of 139.92 and a low of 139.44.

EUR/JPY has opened Asia this week with a strong bid and a bullish gap has been formed. Bears have attempted the downside in Tokyo’s open but are held up at the mid point of the handle and just above the 139.44 pivot. Oddly, EUR/USD bulls have been the driver ahead of the Eurozone’s Emergency Summits starting today.


Greek crunch time


Today sees the emergency summit on Greece. We start with the Eurogroup in the European session’s afternoon ahead of the EU’s Leaders in the evening in the US session. Over the weekend, it has been reported that some progress has been proposed from Athens and Greek PM Tsipras is scheduled to meet with Eurogroup heads to discuss last proposals for a deal. However, should these new proposals be unsatisfactory still, big market risks will come of how the leaders will decide on whether they will allow Greece to default or remain in the Eurozone. The most likely initial outcome could be that Tsipras will be told at their meeting that without an agreement, the ELA will not be extended this week which could ultimately jeopardize the country’s position in the EU. The Yen could come in with its safe haven status as a result and continued selling pressure in the cross could be the outcome in a ‘rational market’ place.


EUR/JPY technically neutral/bearish


Technically, the cross has turned bullish with a bullish gap that has yet to be filled, putting the cross in to a neutral level just above the pivot. A break of 138.90 would put the cross back in to the bears hands and 138.00, June’s key support, would be in the firing line.


Alternatively, a break of 140.65/00 would be very bullish and would leave a case for a buy on dips strategy in a ‘rational market’. However, there may plenty of volatility this week around the Greek crisis and the possibility of a Grexit.