Euro to Decline to Lowest Versus Yen Since October BOJ
Frankfurt (Jan 13) The euro is poised to decline against the yen to the weakest since the Bank of Japan unexpectedly boosted monetary easing in October, IG Markets Securities said, citing trading patterns.
The euro dropped to 139.46 yen, the lowest since Oct. 31, before trading at 140.01 as of 2:08 p.m. in Tokyo. It broke through support at about 140 yen -- the 61.8 percent Fibonacci retracement of the rally from the October low to the December high and the 200-day moving average.
“The euro fell through two key support points, putting it on course to test the Oct. 31 low of 137.68,” Junichi Ishikawa, a market analyst in Tokyo at IG Markets Securities, said by phone today. “The pair could test the 76.4 percent Fibonacci retracement of 137.83 this week.”
The euro may slide to 135 yen as Greece prepares for an election that will help determine whether the country stays in the single currency, according to Ishikawa. Speculation that the European Central Bank will buy sovereign debt to support growth may also push down the currency further, he said.
The euro fell through support as shown in an Ichimoku cloud, underscoring the single currency’s weakness, said Ishikawa, who expects strong selling before the ECB’s policy meeting on Jan. 22.