Yen surges broadly in the later part of Asian session, early European session. The selloff in Chinese stocks in the final two hours could be a factor driving risk aversion. The Shanghai SSE index closed down -1.27% at 2744.07. European indices open mixed with German DAX slightly down by -0.2% at the time of writing.
Despite the strong rebound from 128.49, EUR/JPY was limited below 129.52 minor resistance and drops sharply. 128.49 is back into focus and break will resume whole decline from 131.97. Based on the position strategy as our weekly report, we sold EUR/JPY at 128.60 at open this week. We’ll hold on to the short position, with stop at 129.60, slightly above 129.52 minor resistance. 127.13 is the first target but we’d expect at least a test on 124.61 low if things turns out as we expected.
Also, we’re holding on GBP/CHF short, sold at 1.2971. The development so far is in line with out expectation. We’ll lower the stop to break even at 1.2971. 61.8% projection of 1.3854 to 1.3049 from 1.3265 at 1.2768 as first target. And there is prospect of extending to 100% projection at 1.2460 in medium term.
