EUR/JPY looks to snap 4-day rally, trades near 124.30

Following the flash-crash witnessed in FX markets last week, the EUR/JPY pair staged a decisive recovery and closed the previous four days in the positive territory. However, with dismal macroeconomic data releases weighing on the shared currency on Tuesday, the pair reversed its course and remains on track to finish the day in the red. As of writing, the pair was down 47 pips, or 0.37%, on the day at 124.29.

The monthly report published by the European Commission today revealed that the Economic Sentiment Indicator in December fell to 107.3 from 109.5 in November and fell short of the market estimate of 108.2. Moreover, the Industrial Confidence, Services Sentiment, and Business Climate indexes retreated more than expected as well while the Consumer Confidence index stayed unchanged at -6.2.

Despite the selling pressure surrounding the euro, however, the pair's losses stayed relatively limited with the improved sentiment not allowing the JPY to gather strength. Major European equity indexes closed the day with strong gains while Wall Street opened higher on Tuesday to reflect the risk-on mood.

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