EUR/JPY drops to new 3-week lows near 129.00
|- EUR/JPY sinks well below the 130.00 mark.
- Higher demand for the Japanese yen weighs on the cross.
- Yields of the US 10-year note drop to weekly lows near 1.26%.
The improved sentiment in the Japanese safe haven forces EUR/JPY to shed further ground and trade closer to the 129.00 level, or fresh 3-week lows.
EUR/JPY looks to risk trends
EUR/JPY sheds ground for the second session in a row and extends the recent breakout of the critical 200-day SMA (129.52), opening the door at the same time to further losses in the short-term horizon.
The Japanese yen gathers extra pace and heavily weighs on the cross amidst increasing dollar weakness and a deeper retracement in yields of the US 10-year reference note further south of the 1.30% level to record new weekly lows.
In the euro docket, the Industrial Production in the euro area came in above expectations in July, expanding 1.5% MoM and 7.7% over the last twelve months. During early trade, the relevant Tertiary Industry Activity Index in Japan contracted 0.6% in July from the previous month.
EUR/JPY relevant levels
So far, the cross is down 0.18% at 129.20 and a surpass of 129.81 (55-day SMA) would aim for a move to 130.29 (38.2% Fibo of the June-August drop) and then 130.74 (monthly high Sep.3). On the downside, the next support comes in at 128.59 (monthly low Jul.20) followed by 127.93 (monthly low August 19) and 125.87 (200-week SMA).
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