EUR/JPY remains under pressure around 117.30
|- EUR/JPY tumbles to fresh 4-week lows near 117.20.
- Declining US yields pushes JPY higher.
- EMU Producer Prices disappointed once again.
The increasing demand for the Japanese safe haven keeps putting EUR/JPY under further downside pressure, now forcing it to recede to the low-117.00s, or multi-week lows.
EUR/JP now focused on US data, yields
The cross is trading in the negative territory since Monday. The down move has picked up pace after the miserable print from the US ISM manufacturing re-ignited concerns that a US recession could be in the offing in 2020/21.
Yields of the US 10-year note reacted with a sharp decline, boosting at the same time the appetite for JPY and thus dragging the cross lower.
On the EUR side, the ongoing recovery remains unable to trigger a squeeze higher, let alone a reversion in the trend.
On the docket, EMU’s Retail Sales came in mixed during August, while Producer Prices in the region contracted more than initially estimated.
Moving forward, all the attention will be on the US ISM Non-manufacturing, specially following Monday’s weak reading from the manufacturing gauge. On Friday, the main event will be the US monthly labour report for the month of September.
EUR/JPY relevant levels
At the moment the cross is retreating 0.11% at 117.32 and a breach of 117.24 (monthly low Oct.3) would expose 116.56 (low Aug.26) and finally 115.86 (2019 low Sep.3). On the flip side, the initial resistance aligns at 118.62 (55-day SMA) seconded by 120.01 (monthly high Sep.13) and then 120.15 (100-day SMA).
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