EUR/JPY bounces off daily lows near 121.60

EUR/JPY dropped to fresh lows in the 121.60 region.
EUR is now focused on upcoming ECB minutes.
US CPI results for the month of June next of significance.

Pablo Piovano FXStreet

The bid tone around the Japanese safe haven has forced EUR/JPY to recede to the 121.60 region during early trade, where some decent support emerged.

EUR/JPY upside capped around 122.00

After five consecutive sessions posting gains, the cross is now showing some signs of exhaustion on the back of the renewed buying interest around the Japanee currency.

The dovish message from Fed’s Powell at his congressional testimony yesterday plus FOMC minutes coming in on the same side have motivated US yields to drop abruptly, sparking the move higher in JPY and thus putting the cross under downside pressure.

The sour mood in the greenback has revitalized the risk-associated complex, although the up move in the cross run out of legs just above 122.00 the figure and remains capped by the 55-day SMA at 122.55 for the time being.

In today’s docket, the ECB will publish its minutes from the June meeting ahead of the release of US CPI figures during last month. Earlier in the session, German final CPI met the preliminary readings, showing consumer prices up 0.3% MoM and 1.6% YoY.

EUR/JPY relevant levels

At the moment the cross is retreating 0.10% at 121.90 and a breakdown of 121.31 (low Jul.3) would expose 120.95 (low Jun.21) and finally 120.78 (low Jun.3). On the upside, the next hurdle lines up at 122.32 (high Jul.10) seconded by 122.55 (55-day SMA) and then 123.35 (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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