- EUR/JPY drops and rebounds from the 123.60 region.
- The better mood in the dollar weighs on the cross on Wednesday.
- US ADP, GDP surprised to the upside in the calendar.
The resumption of the risk aversion is lending support to the demand for the greenback and weighs on EUR/JPY, which has so far met contention in the 123.60 area on Wednesday.
EUR/JPY is now focused on upcoming data
EUR/JPY is fading part of the recent 2-day advance to the 124.20 region, area coincident with a resistance line off the June 22 low at 119.31.
The improved sentiment around the buck comes in tandem with the resumption of the risk-off trade among investors on the back of the unremitting advance of the second wave of the COVID-19 pandemic.
In addition, the recent presidential debate between President Donald Trump and his Democrat adversary Joe Biden seems to have casted more questions than answers and it appears to have been also collaborating with the demand for the dollar.
Earlier in the session, ECB’s Christine Lagarde once again showed concerns over the low inflation levels in the region, while Board member Madis Müller talked down the level of the exchange rate.
In the docket, German Retail Sales and the labour market surprised to the upside, while Italian consumer prices are expected to contract more than expected in September.
In the US, the ADP employment report came in at 749K in for the month of September and the final print of the Q2 GDP showed the economy contracted slightly less than forecasted. Additional data include Pending Home Sales, the Chicago PMI and the EIA’s report on crude oil stockpiles.
EUR/JPY relevant levels
At the moment the cross is losing 0.18% at 123.79 and a move below 122.37 (monthly low Sep.28) would open the door to 120.91 (200-day SMA) and finally 119.31 (monthly low Jun.22). On the flip side, the next up barrier is located at 124.60 (55-day SMA) followed by 126.46 (weekly high Sep.10) and then 127.07 (2020 high Sep.1).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.