EUR/JPY accelerates the drop below the 123.00 mark

EUR/JPY drops to 4-day lows near 122.50.
Increasing selling pressure in EUR y JPY drags the cross lower.
German IFO, PMIs came in below expectations earlier in the day.

Pablo Piovano FXStreet

Rising selling interest around both the European currency and the safe haven JPY is forcing EUR/JPY to shed further ground and print new multi-day lows in the mid-122.00s.

EUR/JPY offered on data, sentiment

Declining US yields are lending oxygen to the Japanese currency and therefore are collaborating with the downbeat in the cross.

On the EUR side, disappointing results from the German IFO survey and manufacturing PMIs in core Euroland have been undermining any recovery attempt in the currency.

Looking at the broader view, concerns on the US-China trade, increasing uncertainty around the Brexit negotiations and geopolitical effervescence appear to support the case for a stronger JPY in the near term.

EUR/JPY relevant levels

At the moment the cross is retreating 0.40% at 122.54 and a breach of 122.08 (low May 15) would aim for 120.54 (monthly low Jan.17 2017) and then 118.82 (2019 low Jan.3 ‘flash crash’). On the upside, initial hurdle is located at 123.56 (21-day SMA) followed by 123.75 (high May 21) and finally 124.29 (high May 6).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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