EUR/JPY: Market has turned indecisive amid wild swings in stocks

• EUR/JPY is trapped in a narrowing price range. 
• The direction of the range breakout depends on the broader market sentiment.
• The pair is flashing red in Asia alongside losses in the US stock futures. 

The EUR/JPY market has turned indecisive with the global equities charting big moves in both directions. 

The pair produced a big Doji candle for the second straight day on Tuesday, a sign of indecision or a lack of clear directional bias. 

More importantly, Tuesday's Doji fell within Monday's trading range, which fell within Friday's high and low. 

Essentially, the pair is trapped in a narrowing price range. A close under Tuesday's low of 117.29 would imply range breakdown and could cause more sellers to join the market. On the higher side, Tuesday's high of 119.68 is the level to beat for the bulls.

A bearish close may be seen if the global equities suffer sharp losses. At press time, the futures on the S&P 500, Wall Street's benchmark index, are down over 3% and stocks in Australia and South Korea are shedding 4% and 0.4%, respectively. 

The weak tone in the US stock futures and the Asian equities is likely attracting bids for the anti-risk Yen and weighing over EUR/JPY. The cross is currently trading at session lows near 118.10, representing a 0.23% loss on the day. 

The stock markets have experienced record volatility recently. The US stocks closed higher on Monday with Dow industrials, S&P 500 gaining more than 5%, as the Federal Reserve and White House moved to soften the economic blow of the coronavirus pandemic. 

he Federal Reserve said it would launch a lending facility to support short-term commercial-debt markets to alleviate the pressure in the funding markets, short term credit, as well as equities. Meanwhile, the Trump administration said it plans to send checks directly to Americans as part of a $1 trillion stimulus package. 

The S&P500 dropped 10 percent on Monday to record its second-worst percentage drop ever, behind only the Black Monday crash of 1987.

Technical levels