EUR/JPY trims losses and rebounds from 128.60
- EUR/JPY dropped to the 128.60 region on Thursday.
- Higher US yields push the dollar higher, depress the yen.
- US Retail Sales surprised to the upside in August.
After bottoming out in new lows around 128.60, EUR/JPY now regains some composure and manages to return to the vicinity of the 129.00 barrier.
EUR/JPY bounces off 3-week lows
EUR/JPY extended the downside to the 128.60 region on Thursday on the back of the better note in the greenback, although the subsequent weakness in the Japanese currency encouraged the cross to attempt a rebound back to the proximity of 129.00.
In fact, yields of the key US 10-year reference note gather extra steam and move to daily highs near 1.34%, sustaining the rebound in the dollar and putting the single currency under extra pressure.
The firmer note in the dollar and US yields come in response to the better-than-expected results from the US docket, where headline Retail Sales expanded 0.7% MoM in August, core sales rose 1.8% inter-month and the Philly Fed improved to 30.7 in September. On the negative side, weekly Claims rose by 332K in the week ended on September 11.
EUR/JPY relevant levels
So far, the cross is down 0.21% at 128.94 and a surpass of 129.5481 (200-day SMA) would aim for a move to 130.29 (38.2% Fibo of the June-August drop) and then 130.74 (monthly high Sep.3). On the downside, the next support comes in at 128.59 (monthly low Jul.20) followed by 127.93 (monthly low August 19) and 125.87 (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.
