Chart 1
Chart 2The Yen continued to registered an upbeat mood as wave of risk aversion swept the currency market following the official start of the bear market in Chinese equities, with a 20% decline since Shanghai index peaked in early August (refer to the chart of Shanghai Stock Exchange (SSE) Index -Chart 1).
The Yen longs pushed the EURJPY lower to 132.16 during early New York session yesterday. Refer to chart 2. A bullish engulfing candlestick managed to turn the pair in the opposite direction.
The pair rested at 61.8% retracement for much of late New York session and early Asian session. The Yen weakness was partly due to Asian markets going through gains, as higher commodity prices helped Wall Street to turn positive on yesterday after an erratic opening.
