EUR/JPY upside run out of steam near 126.00, looks to risk trends

  • The cross meets resistance around the 126.00 handle today.
  • Markets remain without clear direction after Easter.
  • Most markets in Europe are closed today.

Alternating risk-appetite trends are now favouring EUR/JPY and pushing it to the area close to daily highs just below the 126.00 hurdle.

EUR/JPY looks to risk trends

Following last week’s deep pullback to the 125.60 region, the cross managed to regain some composure and is now approaching the key barrier at 126.00 the figure.

In fact, poor results from flash manufacturing PMIs in core Euroland on Thursday spooked investors and triggered a wave of selling pressure in the European currency.

This sell off has been later intensified by strong data from US Retail Sales, pushing EUR/USD to weekly lows while widening at the same time the yield gap between the US and its European peers.

In the data space, the German IFO survey will be the next relevant event on Wednesday ahead of the BoJ meeting on Thursday.

What to look for around JPY

The main driver behind the price action around the Japanese Yen is expected to come from the risk appetite trends and their effects on the safe haven flows. In this regard, prospects of slowdown in the global economy are seen supporting the JPY on the back of increasing nervousness among investors. On the soft side for JPY, the Bank of Japan remains strongly committed to its QQE programme, which should limit the upside potential in the currency.

EUR/JPY relevant levels

At the moment the cross is gaining 0.09% at 125.88 and faces the next hurdle at 126.80 (high Apr.17) seconded by 127.50 (2019 high Mar.1) and finally 127.56 (200-day SMA). On the other hand, a breach of 125.65 (low Apr.18) would expose 125.49 (55-day SMA) and then 123.65 (low Mar.28).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: risk-off taking over on trade war escalation

The American Dollar sold off Friday, following US President Trump´s anger discharge on Twitter. The pair soared to 1.1152, its highest for the week, to finally settle at around 1.1140.


GBP/USD: Johnson and Tusk engaged in the blame-game

The GBP/USD pair flirted with the 1.2300 figure late Friday, ending the week with substantial gains around 1.2280, backed by Brexit hopes and the dollar’s broad weakness.


USD/JPY: lower lows at sight on the run to safety

The USD/JPY pair sunk Friday, following US President Trump’s fury with China and Fed’s head Powell, as the market rushed into safety. US yield curve inverted again, fears of recession rule.


Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News

Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more