EUR/JPY defends support at 120 despite the upward revision of Japan's GDP
|- EUR/JPY dropped 13 pips after the upbeat Japanese GDP data.
- The pair is still holding above the psychological support of 130.00.
- A break lower looks likely with the US index futures flashing losses.
The bid tone around the Japanese Yen strengthened following the upbeat Japanese gross domestic product (GDP), but so far, the EUR/JPY cross has been able to avoid a drop below the psychological level of 120.00.
Japan’s economy grew an annualized 1.8% in July-September, much more than the initial estimate of a 0.2% expansion, the Cabinet Office reported a few minutes before press time. The upward revision bettered the estimate for a 0.7% by a big margin.
On a quarter-on-quarter basis, GDP expanded 0.4%, compared with a 0.1% growth in the initial reading and beating the median forecast of 0.2% growth.
Further, Japan's current account surplus JPY 1,816.8 billion in October compared to the median estimate of JPY 1,797.8 billion and up from the preceding month's JPY 1,612.9 billion.
EUR/JPY dropped 13 pips to hit a session low of 120.00 immediately following the release of the better-than-expected data at 23:50 GMT. Currently, the pair is trading at 120.04, representing marginal losses on the day.
The psychological support of 120.00 could be breached, as the futures on the S&P 500 are currently reporting a 0.15% decline. The technical outlook is also bearish with the daily chart showing a downside break of the trendline connecting Nov. 14 and Nov. 25 lows.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.