EUR/JPY falls to test two-year lows as Yen gains momentum on risk aversion
|- Euro consolidates losses on dovish ECB expectations for the September meeting.
- Yen remains strong as bond yields reach new lows on risk aversion.
The EUR/JPY pair extended the reversal and printed a fresh daily low at 117.61, near the 2019 low established on Monday at 117.50.
Earlier today the pair peaked at 118.97 and from the top lost more than a hundred pips, making a significant reversal. It is back under pressure, about to test the 117.50 area, a critical support that if broken would signal more losses ahead.
While the Euro weakened further following comments from European Central Bank board member Rehn. His arguments triggered expectations about a large stimulus package from the ECB next month.
Regarding the yen, it remains among the strongest currencies on the bank of the risk aversion environment. Equity prices on Wall Street failed to make a recovery and US yields continue to move lower supporting the yen. The 10-year reached 1.50% for the first time in three years.
Technical levels
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