EUR/JPY remains under pressure and challenges 128.00

EUR/JPY extends the leg lower to the boundaries of 128.00.
US 10-year yields trade near recent lows around 1.30%.
Markets’ attention remains on the FOMC event on Wednesday.

Pablo Piovano FXStreet

EUR/JPY navigates the lower end of the range near the 128.00 neighbourhood on turnaround Tuesday, extending the bearish move for the sixth session in a row so far.

EUR/JPY focuses on the Fed

EUR/JPY loses ground for the sixth consecutive session and extends the failed attempt to move further north of the 130.30 area earlier in the month.

Despite the risk-off trade gave away some strength in past hours, persistent concerns around China’s Evergrande as well as the progress of the Delta variant continue to keep the risk complex under scrutiny.

In addition, yields of the US 10-year reference note moved lower and re-visit the 1.30% area, some 8 bps lower from last week’s tops past the 1.38% level.

No data releases on Tuesday leaves all the attention to the BoJ event in the first turn on Wednesday seconded by the more relevant monetary policy meeting by the Federal Reserve.

EUR/JPY relevant levels

So far, the cross is down 0.06% at 128.17 and a surpass of 129.57 (200-day SMA) would aim for a move to 130.00 (psychological level) and then 130.74 (monthly high Sep.3). On the downside, the next support comes in at 128.14 (monthly low Sep.20) followed by 127.93 (monthly low August 19) and 125.85 (200-week SMA).

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.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

Euro defends the 1.1500 level ahead of a string of US labour data

The Euro (EUR) posts marginal gains against the US Dollar (USD) on Tuesday as Monday’s reversal from three-week highs at 1.1560 has been contained at 1.1500 so far. A mild risk appetite on hopes of a negotiating process in Iran and investors’ cautiousness ahead of the release of key US labour indicators are providing some support to the pair on Tuesday.

Aave: Bearish RSI divergence risks a 20% drop despite steady DeFi deposits

Aave (AAVE) extends a mild near-term recovery on Tuesday, holding above its 50-day Exponential Moving Average at $90.80. Aave protocol’s V3 deployment on Monad blockchain recorded over $500 million in deposits over the last month, reflecting increased user adoption.

US JOLTs report in focus

In the US, the June JOLTs report will be in the spotlight. Job openings have increased modestly this year, which has historically predicted rising wage cost pressures ahead. June trade balance data will also be released in the afternoon and the preliminary reading pointed towards a stable trade deficit from May. The Fed's Schmid (non-voter, hawk) will be on the wires overnight.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.