EUR/JPY meets support near 124.50 ahead of US data, FOMC

  • EUR/JPY loses further momentum and slips back to 124.50.
  • The cross loses the grip despite the prevailing risk-on sentiment.
  • US FOMC event will be the salient event later in the NA session.

The firmer note around the safe haven Japanese yen has dragged EUR/JPY to the mid-124.00s on Wednesday, where it appears to have met some decent contention so far.

EUR/JPY now looks to the Fed

The sell-off in the dollar coupled with declining yields of the key US 10-year note have been sustaining the improvement in the Japanese yen and forcing EUR/JPY to extend the leg lower further south of 125.00 the figure on Wednesday.

The cross is therefore losing ground for the third consecutive session so far in spite of the markets’ bias towards the risk complex.

Earlier in the euro docket, the trade surplus in the euro bloc widened to nearly €28 billion during July. Across the pond, Retail Sales will grab all the attention in the first turn ahead of the key FOMC meeting scheduled for later in the NA session.

In Japan, the BoJ will hold its monetary policy meeting early on Thursday with consensus practically ruling out any modification of the current monetary stance as well as the bond-purchasing programme.

EUR/JPY relevant levels

At the moment the cross is losing 0.14% at 124.73 and a drop below 124.41 (weekly low Sep.9) would expose 124.28 (weekly low Aug.11) and finally 122.87 (monthly high Jan.16). On the upside, the next up barrier is located at 126.46 (weekly high Sep.10) seconded by 127.07 (2020 high Sep.1) amd then 127.50 (2019 high Mar.1).

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