EUR/JPY drops to multi-month lows near 124.40

The cross sinks to 124.40, levels last seen in June 2017.
The bid tone around the Japanese Yen weighs on the cross.
Risk-off trade keeps prevailing among traders at the beginning of 2019.

Pablo Piovano FXStreet

The continuation of the buying interest around the Japanese safe haven is forcing EUR/JPY to trade in the 124.40 region, area last visited in late June 2017.

EUR/JPY looks to risk trends

The cross is accelerating the downside amidst a deterioration of the risk-on sentiment, with the demand for the Japanese currency gathering extra pace today seconded by a renewed optimism around the buck.

In the same line, EUR/JPY is down for the fifth week in a row, breaking below the sideline theme that prevailed for many weeks since mid-October.

In the data space, final December manufacturing PMIs in the euro area left no room for surprises today, broadly matching the preliminary readings seen earlier in December.

EUR/JPY relevant levels

At the moment the cross is down 1.00% at 124.49 facing the next support at 122.40 (monthly low Jun.15 2017) seconded by 118.24 (monthly low Feb.27 2017) and then 114.84 (2017 low Apr.17). On the upside, a surpass of 126.05 (200-day SMA) would aim for 127.08 (high Dec.27 2018) and finally 127.25 (21-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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