EUR/JPY around 120.00, rebounds from yearly lows

EUR/JPY comes under extra pressure near 120.00.
Wuhan coronavirus remains in centre stage.
FOMC, BoE, Brexit expected to rule the sentiment.

Pablo Piovano FXStreet

EUR/JPY remains on the defensive on Monday, although it has managed to rebound from earlier yearly lows near 119.90.

EUR/JPY focused on risk trends

The cross is down for the third consecutive session at the beginning of the week, coming under heavy selling pressure after breaking below key levels at the 200-day SMA (120.78) and the 100-day SMA (120.28).

The persistent selling mood surrounding the European currency has been exacerbated earlier today after the German IFO indicator failed to surprise markets to the upside in January.

In addition, concerns around the Chinese coronavirus and its impact on global growth continue to underpin the demand for the safe haven yen, thus keeping any serious recovery in the cross limited for the time being.

Moving forward, the FOMC meeting will be the salient event later in the week along with the Q4 GDP figures and PCE results, all in the US docket. On this side of the Atlantic, the BoE’s ‘Super-Thursday’ should attract the bulk of the attention on Thursday ahead of the Brexit deadline on Friday.

EUR/JPY relevant levels

At the moment the cross is losing 0.25% at 120.11 and a breach of 119.91 (2020 low Jan.27) would aim for 119.65 (low Nov.26 2019) and finally 119.24 (monthly low Nov.14 2019). On the other hand, the initial up barrier is located at 120.78 (200-day SMA) seconded by 121.04 (55-day SMA) and then 122.87 (2020 high Jan.16).

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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