The single currency came under sudden selling pressure on Friday, which sent EUR crosses lower and EURJPY was trading down 40 pips from daily highs, hovering at around 121.80 ahead of the US session.
The macro calendar did not bring any major news today and market participants will focus only on the US PPI indices, which are expected to slow, although marginally. These indices rarely cause any market movement.
The US dollar has been weaker recently, especially against commodity linked currencies, such as the AUD or NZD, but the EURUSD and GBPUSD pairs remain offered on rallies as both the EU countries are facing their own huge problems.
Moreover, Goldmas Sachs has warned that Donald Trump might authorize a direct intervention by the Fed to weaken the US dollar, which aint exactly dollar positive.
Technically speaking, the EURJPY cross is now testing previous support of 121.800, but it looks like this level wont hold for too long. Another buying zone could be seen at yesterday's lows of 121.65.
However, there is a medium-term uptrend line, which has held a couple of times and is currently located at 121.75. Thus, bulls need to defend the 121.800 - 121,65 area in order to remain in a medium-term bullish trend.
On the upside, the resistance seems to be at today's highs at 122.200, afterward at around 122.33, where Wednesday's top has formed. If the price rallies above this level, the bullish outlook would be confirmed, most likely, and the next target could be at around 122.60/80.
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