EUR/JPY back below 121.00 on EUR-selling

EUR/JPY loses the grip and recedes to sub-121.00 levels.
Rising jitters on Italian politics weigh on EUR.
US Consumer Sentiment next of relevance.

Pablo Piovano FXStreet

The renewed selling bias around the European currency is now forcing EUR/JPY to abandon the 121.30 region and retreat to the sub-121.00 area.

EUR/JPY offered on Italian politics

The cross is extending the negative performance for the sixth session in a row on Friday, leaving behind the initial optimism that pushed it to as high as the 121.30 region, or 2-day lows.

EUR has given away its daily gains after the re-emergence of political concerns in Italy, where rumours of a government crisis involving Lega Nord and M5S have picked up pace as of later along with the probability of early elections.

In the meantime, the Japanese currency stays on the defensive on the back of the rebound in US yields, particularly after FOMC’s J.Bullard ruled out a large rate cut at this month’s meeting.

Data wise today, another poor print in the German docket saw Producer Prices coming in below expectations during last month. In the US, the advanced gauge of the US Consumer Sentiment for the current month is next on tap.

EUR/JPY relevant levels

At the moment the cross is receding 0.04% at 120.94 and a breakdown of 120.78 (low Jun.3) would expose 119.33 (low Feb.8 2017) and then 118.82 (2019 low Jan.3). On the upside, the initial hurdle aligns at 121.82 (21-day SMA) seconded by 122.32 (high Jul.10) and then 123.35 (monthly high Jul.1).

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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