EUR/JPY eases from tops beyond the 126.00 mark ahead of US data

EUR/JPY recedes from earlier tops beyond the 126.00 mark.
Market sentiment is slightly tilted to the risk-off side.
US July’s Durable Goods Orders next on tap in the docket.

Pablo Piovano FXStreet

The better tone in the safe haven universe keeps the riskier assets under pressure in the middle of the week, dragging EUR/JPY back to the mid-125.00s, where some decent support appears to have emerged.

EUR/JPY focused on data, risk trends

After surpassing the 126.00 barrier earlier in the session, EUR/JPY sparked a correction lower that met initial contention in the 125.40/45 band for the time being.

The cross is reversing two consecutive daily advances so far on Wednesday, failing once again to move further north of the 126.00 barrier on a more convincing fashion. In fact, the resumption of the risk aversion among market participants has undermined the recent recovery in EUR/JPY against the usual backdrop of alternating headlines on the US-China trade front, US political uncertainty and the unremitting progress of the coronavirus pandemic.

Earlier in the calendar, Consumer Confidence in France met estimates at 94 for the current month. Across the pond, MBA’s Mortgage Applications contracted 6.5% from a week earlier, while July’s Durable Goods Orders are coming up next seconded by the EIA’s report on crude oil inventories.

EUR/JPY relevant levels

At the moment the cross is losing 0.33% at 125.48 and a drop below 124.44 (weekly low Aug.21) would expose 124.28 (weekly low Aug.11) and finally 122.87 (monthly high Jan.16). On the other hand, the next hurdle aligns at 126.75 (2020 high Aug.13) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1).

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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