EUR/JPY comes under pressure near 130.50, focus on FOMC

EUR/JPY extends the bearish move to the mid-130.00s.
The risk aversion prevails in the global markets so far.
Investors’ attention is expected to be on the FOMC Minutes.

Pablo Piovano FXStreet

The persistent risk-off mood keeps the dollar underpinned and put EUR/JPY to further downside pressure on Wednesday.

EUR/JPY faces the next support around 130.00

EUR/JPY loses ground for yet another session and the recent breakdown of the 100-day SMA (131.00) as well as the 131.00 round level appears to have opened the door for a deeper pullback to June lows in the 130.00 neighbourhood.

The strong re-emergence of the Delta variant of the coronavirus, market chatter factoring in the likeliness of fresh restriction measures in many economies and softer-than-forecast data results on both sides of the ocean have been putting the risk complex under extra downside pressure in past sessions.

Data wise in Euroland, German Industrial Production extended the April’s contraction into May (0.3% MoM), adding to Tuesday’s poor results from the ZEW survey.

Later on Wednesday, market participants are expected to closely follow the publication of the FOMC Minutes of the June gathering, where the centre of the debate is seen around the tapering talk and potential interest rate hikes.

EUR/JPY relevant levels

So far, the cross is retreating 0.02% at 131.63 and faces the next support at 131.27 (weekly low Jun.30) followed by 130.94 (100-day SMA) and then 130.04 (monthly low Jun.21). On the other hand, a surpass of 132.43 (monthly high Jul.1) would aim for 132.69 (weekly high Jun.23) and finally 133.00 (round level).

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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