Crosscurrents taking USD/JPY lower, EUR/USD rips on a potential stop hunt

• USD/JPY has started out in Tokyo with bulls losing grip bears taking back control.
• There has been a big move in EUR/USD at the same time.

USD/JPY has started out in Tokyo with bulls losing grip bears taking back control. There has been a big move in EUR/USD at the same time, (1.1660) and the dollar has broken below the 95 handle. Currently, USD/JPY is trading at 111.29 having made a low of 111.27 and a high of 111.52.

USD/JPY had been taking up the safe haven bid while there are questions over how the Japanese economy would fare up with China in decline. However, for whatever reason, markets are attacking the dollar and the euro seems to be the mover on stop hunting, clearing out the less committed bears out there. 

Crosscurrents taking USD/JPY lower

However, there is little out there that supports the case for long euro, albeit there have been some less negative wires on the political front with respect to Italy and Brexit and there have not been any EM nor fresh trade headlines to sink the dollar's peers so far this week. There are big boy bulls out there protecting key levels in EUR/USD and this is a major squeeze taking place that may make for a fresh round of selling if key upside levels are not accomplished -first being the thin daily cloud base at 1.1670. 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that technically, the positive momentum eases:

"The downside potential seems limited given that, in the 4 hours chart, indicators are retreating within positive territory but remain well above their midlines, while the pair continues developing above its 100 and 200 SMA which hover around the 111.00 figure. Last week high at 111.82 is the immediate resistance, followed by August monthly high at 112.14, with gains above this last anticipating a steeper recovery."