At the time of writing, European stock markets such as the DAX index were down by 1.5%, while the S&P 500 had slipped by another 24 points following yesterday’s slide of 43.7 points. Normally, such declines would have a large positive effect on the Japanese Yen as it is seen as a safe-haven asset, however, the gains in the JPY have been modest so far.
USDJPY continues to be capped by the September 15 high of 108.49 and is trying to turn lower. I suspect the price might trade to the September 4 low of 105.82, as long as the price trades below the September 15 high. In the short-term, the price probably needs to slide below the September 16 low of 107.48 for the downtrend to accelerate.
EURJPY has been consolidating since Thursday, however, in the London morning, the price was below the September 26 low of 117.44. The move lower would normally have translated into deeper losses, yet the price is now back into its range. If the price manages to establish itself below today’s low of 117.33, then it might be what is need to get the downtrend going. The next support level below today’s low is the 78.60% correction level at 116.70, followed by the September low at 115.87.
For the short-term trend to turn upwards in EURJPY, the price will need to trade above the September 30 high of 118.22.