EUR/JPY flirting with daily lows near 118.60

EUR/JPY comes under extra downside pressure below 119.00.
Markets’ focus remains on US-China trade war, Chinese counter-measures.
Weekly upside appears limited ahead of the 120.00 handle.

Pablo Piovano FXStreet

The now softer tone around the European currency is dragging EUR/JPY to the area of fresh lows around 118.60.

EUR/JPY looks to trade developments, risk trends

The cross is now losing ground for the second straight session, coming under renewed downside pressure following Tuesday’s tops in the boundaries of 120.00 the figure.

The prevailing bias towards safe haven assets has been collaborating with the leg lower in the cross via a heightened demand for the Japanese Yen, all against the backdrop of declining global yields.

In the meantime, the US-China trade front appears somewhat calmed in past hours, which has given an apparent respite to markets’ sentiment and sparked the current cautious trade.

Data wise, earlier in the session the Japanese Current Account surplus rose to ¥1.94 trillion in June and ¥1.211 trillion non-seasonally-adjusted, while Bank Lending expanded at an annualized 2.3% in July.

EUR/JPY relevant levels

At the moment the cross is losing 0.36% at 118.56 and a breakdown of 117.67 (2019 low Aug.5) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016). On the upside, the next hurdle is located at 119.87 (high Aug.6) followed by 120.44 (21-day SMA) and then 121.38 (high Jul.30).

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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