EUR/JPY meets sellers above 127.00, looks to NFP
|- EUR/JPY struggles to advance further north of 127.50.
- The Japanese yen remains on the defensive amidst dollar strength.
- US Nonfarm Payrolls will set the tone in the markets later on Friday.
After hitting fresh yearly peaks in the mid-127.00s, EUR/JPY came under selling pressure against the backdrop of the lack of direction in the global markets ahead of the release of December US Payrolls.
EUR/JPY looks to data, yields
EUR/JPY trades on the defensive and halts a 4-day positive streak, including a move to fresh YTD top around 127.50 on Thursday. This level coincides with the 2019 highs recorded back in March of that year.
EUR/JPY now looks side-lined against the usual pre-Payrolls lull, but the recent upside came in tandem with renewed depreciation of the Japanese safe haven vs. its American counterpart, always in response to the strong rebound in US 10-year yields (beyond the 1.0% yardstick).
On the data front, the upbeat momentum in the German manufacturing sector was confirmed by the 0.9% expansion of the Industrial Production in November. Still in Germany, the trade surplus eased to €14.6 billion in the same period.
Investors, however, will be closely watching the release of the December’s US Nonfarm Payrolls, with initial estimates pointing to a poor 71K job creation and an uptick of the jobless rate to 6.8%.
EUR/JPY relevant levels
At the moment the cross is losing 0.06% at 127.24 and faces the next hurdle at 127.49 (2021 high Jan.7) followed by 127.50 (2019 high Mar.1) and then 129.25 (monthly high Dec.13 2018). On the downside, a drop below 126.44 (21-day SMA) would aim for 125.70 (low Dec.16 2020) and finally 124.87 (55-day SMA).
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