EUR/JPY dips below 120.00 on coronavirus fears and geopolitical tensions

EUR/JPY reports losses for the third straight day and prints lows below 120.00.
Renewed coronavirus fears weigh over the risk assets.
Tensions between the US and China over Uighur bill add to bullish tone around the JPY.

Omkar Godbole FXStreet Contributor

The anti-risk Japanese yen is drawing bids on geopolitical tensions and renewed coronavirus scare and pushing the EUR/JPY pair lower for the third straight day.

The currency pair is currently trading at session lows near 112.00, representing a 0.26% decline on the day. The pair put in a low of 119.82 a few minutes before press time.

Coronavirus fears

The heightened fears of the second wave of the coronavirus outbreak seem to be keeping the risk under pressure.

On Wednesday, the Covid-19 cases in Texas rose by 3.4% above the seven-day average of 2.7%. Meanwhile, numbers also increased in states of Florida, Arizona, and Oklahoma. Elsewhere, Beijing undertook strict actions by cutting off the air travels and recalling the lockdowns to tame the deadly disease from spreading.

The financial markets did get a piece of good news early Thursday in the form of a rate cut by China. So far, however, that has failed to put a bid under the risk assets, as evidenced by the losses in the US stock futures. At press time, the S&P 500 futures are reporting a 1.2% decline on the day.

China threatens retaliation

On Wednesday, President Donald Trump signed a measure, calling for sanctions against Chinese officials responsible for imprisoning more than one million Muslims in Uighur.

The move has irked Beijing and the dragon nation has threatened retaliation if Washington moves forward with the Uighur bill. Meanwhile, border tensions between India and China remain high. These geopolitical tensions are likely adding to the bearish tone around the risk assets.

Technical levels

1. R3 75
2. R2 74.66
3. R1 74.16
PP 73.82
1. S1 73.32
2. S2 72.98
3. S3 72.48

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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