• EUR/JPY bounces off lows near 130.00 the figure.
  • Lower US yields underpin the buying pressure in JPY.
  • All eyes on Chief Powell’s testimony to Congress later on Wednesday.

The now better tone in the Japanese yen weighs on EUR/JPY and drags it back to the 130.20 area, posting marginal gains for the day so far.

EUR/JPY now looks to Powell

EUR/JPY trades within a narrow range above the psychological 130.00 barrier on Wednesday and attempts to resume the upside following Tuesday’s deep pullback in the wake of higher-than-expected US inflation figures.

However, the ongoing retracement in yields of the key US 10-year benchmark motivates the demand for the Japanese safe haven to re-emerge and therefore puts the cross under some downside pressure, all amidst the correction lower in the buck.

In the meantime, high US inflation, tapering prospects and potential interest rate hikes (well before expectations) will all take centre stage at Chairman Powell’s testimony to the Congress on the Monetary Policy Report, due later in the NA session.

In the calendar earlier in the session, Japan’s Industrial Production contracted at a monthly 6.5% in May, while the same indicator in the Euroland saw a 1.0% MoM contraction in the same period.

EUR/JPY relevant levels

So far, the cross is advancing 0.09% at 130.36 and a surpass of 131.12 (100-day SMA) would aim for 132.30 (50-day SMA) and finally 132.69 (weekly high Jun.23). On the downside, immediate support comes in at 129.62 (monthly low Jul.8) followed by 128.29 (weekly low Mar.24) and then 128.25 (200-day SMA).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD steadies near 1.0200, US inflation awaited

EUR/USD steadies near 1.0200, US inflation awaited

EUR/USD is holding steady near 1.0200, extending choppy trading in the European session. The US dollar struggles to find demand amid weaker Treasury yields, as all eyes remain on the all-important inflation data. 


GBP/USD turns sideways below 1.2100 ahead of US Inflation

GBP/USD turns sideways below 1.2100 ahead of US Inflation

GBP/USD is juggling in a tight range below 1.2100, as investors refrain from placing bets on the pair ahead of the US Inflation data. The annualized US CPI is seen softening in July to 8.7%, although core figures are likely to quicken. 


Gold eyes key levels and US inflation

Gold eyes key levels and US inflation

Gold price is easing from near monthly highs ahead of US inflation. US CPI will shape the Fed rate hike policy and market sentiment. XAU/USD sees healthy barriers on both sides amid a sense of caution.

Gold News

Crypto markets tumble, but the worst is yet to come

Crypto markets tumble, but the worst is yet to come

Bitcoin price is trying to undo the gains it witnessed over the last week and is currently at the midway point. This sell-off has caused Ethereum and Ripple prices to follow suit, pausing the rallies that altcoins were experiencing.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!