- EUR/JPY fades the earlier spike just above 118.00.
- JPY depreciates on better mood in yields.
- EUR under heavy selling pressure following ECB comments.
After a brief test of the 118.00 neighbourhood, EUR/JPY came under renewed selling pressure and has now receded to the 117.70 area.
EUR/JPY looks to yields, risk
The cross is now losing ground for the third consecutive session, returning to levels close to YTD lows in the mid-117.00s in response to increased downside pressure surrounding the European currency.
In fact, EUR broke below the multi-session sideline theme and is now opening the door to a probable test of 2019 lows in the 1.1030/20 band vs. the Greenback, all following yesterday’s comments by ECB’s board member O.Rehn. It is worth recalling that Rehn suggested the imminent stimulus package from the ECB could come in above markets’ expectations.
Also weighing on the single currency, poor releases in the docket earlier in the week showed any ‘green dots’ or sign of improvement in the region still remains way absent.
EUR/JPY relevant levels
At the moment the cross is losing 0.05% at 117.81 and a breakdown of 117.51 (2019 low Aug.12) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016). On the upside, the next hurdle is located at 119.51 (21-day SMA) followed by 119.87 (high Aug.6) and then 121.38 (high Jul.30).
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