EUR/JPY retreats to weekly lows in sub-131.00 levels

EUR/JPY remains on the defensive near the 131.00 mark.
The dollar looks firm amidst steady US yields.
US ADP report came in short of estimates at 742K.

Pablo Piovano FXStreet

The selling bias around the European currency puts EUR/JPY under further pressure and motivates it to challenge the key support at the 131.00 zone.

EUR/JPY focused on risk trends

EUR/JPY’s downside navigates its second consecutive session so far on Wednesday amidst the perseverant rebound in the greenback, steady US yields and loss of momentum in the broad risk complex.

In fact, the greenback stays on the positive footing despite the flat activity in US yields, while it derived extra oxygen from Yellen’s comments on Tuesday and the shift in investors’ focus to the US economic recovery.

In the docket, German final Services PMI slipped back below the 50.0 mark in April, while Producer Prices in the euro area rose 1.1% inter-month in March and 4.3% over the last twelve months.

In the US, the ADP report showed the US private sector added 742K jobs during last month, a tad below forecasts (800K). Later, the ISM Non-Manufacturing will take centre stage.

EUR/JPY relevant levels

So far, the cross is losing 0.07% at 131.17 and faces immediate contention at 130.98 (weekly low My 5) seconded by 129.94 (50-day SMA) and finally 129.58 (weekly low Apr.23). On the other hand, a surpass of 132.36 (2021 high Apr.29) would pave the way for a test of 133.00 (psychological hurdle) and then 133.13 (monthly high Sep.21 2018).

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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