EUR/JPY upside capped by the 55-day SMA near 124.40
|- EUR/JPY remains under pressure well below the 124.00 mark.
- The Japanese yen stays bid and keeps weighing on the cross.
- US flash Consumer Sentiment next of relevance in the calendar.
The persistent buying interest in the Japanese safe haven continues to put EUR/JPY under pressure and forces it to extend the drop to the 123.40 region on Friday, or new 2-month lows.
EUR/JPY now looks to data
Following a brief test of the 124.40 region – coincident with the 55-day SMA - early in the Asian trading hours, the selling bias resurfaced in EUR/JPY in response to the strong sentiment favouring the Japanese yen.
The cross not only broke below the 124.00 level soon afterwards, but it also recorded fresh multi-week lows in the vicinity of 123.40, all amidst the mild bias towards the risk aversion.
In the docket, earlier Japanese inflation figures gauged by the National Core CPI showed consumer prices contracted 0.4% on a year to August, matching previous estimates.
Closer to home, the current account surplus in the broad Euroland widened to €25.5 billion during July. Across the ocean, the preliminary gauge of the US Consumer Sentiment for the month of September is coming up next.
EUR/JPY relevant levels
At the moment the cross is losing 0.33% at 123.68 and a drop below 123.31 (monthly low Sep.18) would aim for 122.87 (monthly high Jan.16) and finally 122.04 (100-day SMA). On the upside, the next up barrier is located at 125.30 (21-day SMA) followed by 126.46 (weekly high Sep.10) and then 127.07 (2020 high Sep.1).
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