EUR/JPY flirting with 2019 lows near 118.50 ahead of NFP

EUR/JPY recorded fresh yearly lows near 118.43 during early trade.
Fresh US tariffs on Chinese products hit the cross via JPY demand.
US Non-farm Payrolls expected at 170K in July.

Pablo Piovano FXStreet

The increasing demand for the Japanese currency sunk EUR/JPY to fresh yearly lows in the 118.40 region, where some contention appears to have turned up.

EUR/JPY weaker on Trump’s tariffs

The cross has quickly dropped to levels last seen in April 2017 in the mid-118.00s after President Trump unexpectedly announced late on Thursday an extra 10% tariffs on US imports of Chinese products worth $300 billion.

The announcement rapidly sparked a rush to safer assets – namely bonds and JPY – amidst renewed fears over the global growth. The move in the fixed income space forced yields of the US 10-year reference to drop to the sub-1.84% area, levels last visited in November 2016 pari passu with the slump in USD/JPY to fresh 7-month lows.

Later in the session, the broad risk appetite trends will be in the limelight as July’s Non-farm Payrolls are next of relevance on the docket. Market consensus expects the economy to have created nearly 170K jobs during last month and the jobless rate to remain steady at 3.7%.

EUR/JPY relevant levels

At the moment the cross is receding 0.32% at 118.60 and a breakdown of 118.43 (2019 low Aug.2) would expose 118.23 (monthly low Feb.24 2017) and then 114.85 (2017 low Apr.17). On the upside, the initial hurdle aligns at 120.45 (10-day SMA) seconded by 121.03 (21-day SMA) and finally 121.37 (high Jul.25).

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.

EUR/USD: Gains remain capped by 1.1650

EUR/USD remains in recovery-mode following the closing bell in Euroland on Wednesday, hovering around the 1.1650 zone amid renewed downside pressure on the US Dollar and a marginal improvement in the global sentiment.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold struggles to surpass $5,200

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.