EURJPY Range Support (Nov 09, 2016)

Price is now making its way towards support at the 112.75 area and might even be poised for a break lower. 

The moving averages are still oscillating, which suggests that the consolidation could carry on. Price is heading below these dynamic inflection points, an early indication that selling pressure is taking hold. 

Stochastic turning down from the overbought zone to show a pickup in bearish momentum. There's still plenty of room for the oscillator to head south so sellers may be in control for some time. If price breaks below support, EURJPY could be in for a 300-pip drop, which is roughly the same height as the range. 

The US election results are taking its toll on market sentiment, sending global futures down and spurring a flight to the safe-haven Japanese yen. So far, the growing lead by Republican nominee Donald Trump is sparking a lot of fear and uncertainty since his brash rhetoric could have repercussions on financial markets. 

Data from the euro zone was also mostly weaker than expected, with German industrial production down 1.8% versus the projected 0.6% drop and both German and French trade balance printing worse than expected readings. 

Data from Japan has been mixed, but it looks like the lower-yielding currency is taking its cue from risk sentiment above anything else. A Clinton victory could still yield a return in risk-taking, possibly allowing EURJPY to head back to the top of its range while a Trump win could lead to significant declines. 

By Kate Curtis from Trader's Way