EUR/JPY recedes from YTD peaks, looks supported around 132.00

EUR/JPY records new 2021 highs, retreats afterwards.
US yields come under pressure and drag the dollar lower.
Initial Claims rose by 473K, Producer Prices rose 0.6% MoM.

Pablo Piovano FXStreet

After recording new YTD highs in the 132.70/75 band earlier in the session, EUR/JPY came under some selling pressure on Thursday.

EUR/JPY stays supported near 132.00

EUR/JPY extends the weekly advance well past the 132.00 yardstick and visits the area last seen in September 2018 beyond 132.70.

The strong pick-up in US yields re-ignited the selling bias around the Japanese yen, all rendering in further upside traction in EUR/JPY.

Indeed, US inflation figures for the month of April came in stronger than initially estimated, fueling further the market chatter regarding higher inflation in the next months and lifting US 10-year yields back to the 1.70% area.

Nothing scheduled in the euro docket on Thursday left all the attention to the US calendar: Initial Claims rose by 473K during last week, headline Producer Prices gained 0.6% MoM in April and 6.2% from a year earlier, while Core prices rose 0.7% inter-month and 4.7% vs. April 2020.

EUR/JPY relevant levels

So far, the cross is gaining 0.10% at 132.43 and a surpass of 132.73 (2021 high May 12) would pave the way for a test of 133.00 (psychological hurdle) and then 133.13 (monthly high Sep.21 2018). On the flip side, immediate contention is located at 130.98 (weekly/monthly low May 5) seconded by 130.31 (50-day SMA) and finally 129.58 (weekly low Apr.23).

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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