EUR/JPY slips back to new YTD lows near 119.00 ahead of US CPI
|- EUR/JPY loses the grip and trades closer to 119.00.
- EUR-selling plus risk-off mood weigh on the cross.
- US January’s CPI results next of relevance in the docket.
The resurgence of the risk aversion in the global markets gave extra wings to the yen and is forcing EUR/JPY to drop further and print new yearly lows in the 119.20/15 band on Thursday.
EUR/JPY focused on China, data
The cross is extending the weekly downside for the second session in a row so far on Thursday, trading in levels last seen in October 2019 on the back of renewed risk aversion and unremitting weakness hurting the European currency.
In fact, renewed concerns around the COVID-19 appeared after Singapore reported an spike in coronavirus cases (from 8 to 58), sustaining the demand for safe havens and thus putting the cross under extra pressure.
In addition, the selling sentiment remains entrenched into the euro and it has gathered extra pace in past hours following another contraction in Industrial Production in Euroland during December (published on Wednesday).
Later in the day, all the attention will be on the release of US inflation figures gauged by the CPI during January, followed by the usual weekly report on the US labour market and the speech by New York Fed J.Williams (permanent voter, centrist).
EUR/JPY relevant levels
At the moment the cross is losing 0.49% at 119.11 and a drop below 118.82 (‘flash crash’ Jan.3 2019) would aim for 117.07 (monthly low Oct.7 2019) and finally 115.86 (2019 low Sep.3). On the upside, the next hurdle aligns at 120.57 (weekly high Feb.10) followed by 120.48 (200-day SMA) and then 121.15 (monthly high Feb.5).
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