EUR/JPY accelerates the drop below 119.00
|- EUR/JPY erodes gains and returns below the 119.00 handle.
- Declining US yields bolster the demand for JPY.
- German Industrial Production contracted more than expected in June.
The now better tone in the Japanese safe haven in combination with EUR-weakness has dragged EUR/JPY back below the 119.00 handle after clinching tops in the 119.20 area in early trade.
EUR/JPY focused on yields, trade
After two consecutive daily gains and a failed move beyond 120.00 the figure, the cross is now receding to the sub-119.00 area on the back of the resurgence of the buying interest in the Japanese safe haven.
In addition, the decline in US yields remains everything but abated, with the 10-year benchmark dropping to the vicinity of 1.65%, area last visited in October 2016. The descent in yields has accelerated today after China continued to disprove the recent US accusations of being a currency manipulator.
In the docket, initial EUR-selling also followed the poor prints from German Industrial Production in June, contracting 1.5% from a month earlier.
EUR/JPY relevant levels
At the moment the cross is losing 0.39% at 118.74 and a breakdown of 117.67 (2019 low Aug.5) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016). On the upside, the next hurdle is located at 119.87 (high Aug.6) followed by 120.59 (21-day SMA) and then 121.38 (high Jul.30).
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