- EUR/JPY drops to fresh lows in sub-121.00 levels.
- Daily upside meets resistance at the 10-day SMA near 121.50.
- US ISM Non-manufacturing next of significance in the docket.
The softer tone in the European currency is motivating EUR/JPY to give away some of Monday’s gains and recede to the area below 121.00 the figure.
EUR/JPY focused on geopolitics, data
The cross appears to have resumed the downside on Tuesday following Monday’s strong advance. Furthermore, the cross briefly tested so far yearly lows in the 120.20/15 band at the beginning of the week, where decent contention seems to have emerged.
In the meantime, sentiment in the global markets continue to look to the US-Iran conflict as the main source for price action, now relegating US-China trade headlines to a second place in relevance.
It is worth mentioning that investors’ flight-to-safety following the US strike that killed a key Iranian commander was exclusively behind the sharp appreciation of the Japanese yen in past sessions, forcing the cross to abandon the 122.50 region and to drop to as low as the proximity of 120.10.
In the data space, flash inflation figures in Euroland for the month of December showed the headline CPI is expected to rise at an annualized 1.3%. When comes to consumer prices excluding food and energy costs, the CPI is also seen at 1.3% YoY. Further data in the region saw Retail Sales expanding more than expected during November.
Later in the NA session, the focus of attention will be on the release of the ISM Non-Manufacturing during last month.
EUR/JPY relevant levels
At the moment the cross is losing 0.28% at 120.99 and a breach of 120.16 (2020 low Jan.3) would expose 119.69 (100-day SMA) and finally 119.24 (monthly low Nov.14). On the other hand, the next up barrier emerges at 121.46 (10-day SMA) seconded by 122.23 (monthly high Dec.23 2019) and then 123.35 (monthly high Jul.1 2019).
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