EUR/JPY remains under pressure around 124.80

EUR/JPY meets selling pressure below 125.00 on Monday.
EMU’s Sentix Index rebounds further to -13.4 for the current month.
Market participants keep looking to US politics for price direction.

Pablo Piovano FXStreet

The continuation of the offered note in the European currency plus further recovery in the greenback motivated EUR/JPY to extend the leg lower from last week’s new YTD peaks.

EUR/JPY offered below 125.00

After recording fresh 2020 highs in the vicinity of 125.60 in the second half of last week, EUR/JPY triggered a corrective downside mainly in response to overbought conditions and investors’ profit taking mood in light of the June-August strong rally.

In the meantime, markets remain vigilant on the political developments in the US, always with the Republican-Democrat discussion over another coronavirus relief package in centre stage as well as almost omnipresent effervescence in the US-China trade/geopolitical front.

Data wise in the region, the Sentix Index – which gauges the investors’ confidence in the euro area – extended the bounce to -13.4 for the current month, adding to the latest improvement in several fundamentals in the bloc.

Nothing worth mentioning in the US docket, where the JOLTs job Openings will be the sole publication later in the session.

EUR/JPY relevant levels

At the moment the cross is losing 0.06% at 124.73 and a drop below 122.87 (monthly high Jan.16) would expose 121.14 (monthly high Mar.25) and then 120.11 (200-day SMA). On the other hand, the next up barrier lines up at 125.58 (2020 high Aug.6) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1).

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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