EUR/JPY bounces modestly from key support, fails to hold above 118.00
|- Euro remains weak across the board, the boost from German report was short-lived.
- EUR/JPY heads for lowest weekly close since April 2017.
The EUR/JPY pair bounced from weekly lows and rose to 118.14, but the Euro was unable to hold on top of 118.00, showing no strength for a more relevant recovery.
German stimulus creates bounce, but only for a few minutes
After the beginning of the American session, the pair bottomed at 117.56, the lowest level since Monday. Then it rose more than 50 pips quickly from the low following a report from Der Spiegel mentioning that the German government is prepared for deficit spending in case of a recession.
The news boosted the Euro that trimmed losses across the board. The common currency is today and also for the week, among the worst performers affected by the latest round of EZ economic data and also amid rising expectation about a large stimulus package from the European Central Bank in September.
The boost pushed EUR/JPY from near the critical support at 117.50 to 118.13. But as of writing, it is back below 118.00, flat for the day and marginally lower for the day. While the Euro continues to be able to defend the 117.50 area, has been having difficulties on staging a bullish correction and every run higher, was sold later.
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