EUR/JPY breaks below 118.00 and prints fresh daily lows

EUR/JPY breaches the key support at the 118.00 mark.
Stronger Dollar boost the selling mood in EUR.
Everybody is looking at the speech by Fed’s Powell later today.

Pablo Piovano FXStreet

The increasing selling pressure around the European currency is now driving EUR/JPY to the area of new daily lows in the sub-118.00 zone.

EUR/JPY now focused on Powell

The cross has intensified the daily downside today following the increasing offered tone in the single currency, all against the backdrop of the unabated rally in the Greenback. In fact, gauged by the US Dollar Index (DXY), the buck trades in fresh tops in the 98.45/50 band.

In addition, US yields are extending the rebound and have already tested new weekly tops in the 1.66% area, lending at the same time further legs to the selling impetus in the Japanese safe haven.

Nothing scheduled today in Euroland, while Japanese inflation figures tracked by the National CPI rose 0.1% MoM in July and 0.5% on a yearly basis. The Core reading gained 0.6% over the last twelve months.

All eyes then on the upcoming speech by Chief J.Powell at the Jackson Hole Symposium later today, where the centre of the debate will surely be on the next steps regarding the interest rate path and the outlook for the US economy.

EUR/JPY relevant levels

At the moment the cross is losing 0.04% at 117.85 and a breach of 117.51 (2019 low Aug.12) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016). On the other hand, the next hurdle lines up at 118.85 (21-day SMA) followed by 119.87 (high Aug.6) and then 120.63 (55-day SMA).

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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