- The cross drops further south of the 126.00 key support.
- The selling pressure in EUR weighs on the cross.
- German IFO survey surprised to the downside in April.
The offered bias around the single currency is now forcing EUR/JPY to remain on the defensive below the 126.00 handle.
EUR/JPY weaker on sentiment, data
The cross is down for the second straight session today, extending the recent breakdown of the key 126.00 barrier, coincident with the 10-day SMA.
The downside momentum around the European currency has picked up traction today after the key gauge of sentiment in Germany, the IFO survey, failed to re-ignite hopes of a rebound in April.
In fact, Business Climate dropped to 99.6 for the current month, a tad lower than the previous reading although within the broader downtrend seen since August 2018.
Looking ahead, the Bank of Japan will hold its monetary policy meeting tomorrow seconded by the usual press conference by Governor H.Kuroda. Market consensus expects no changes to the current QQE programme nor significant announcements by the central bank.
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 retreating 0.18% at 125.34 and a breach of 124.77 (low Apr.10) would expose 124.27 (low Mar.8) and then 123.65 (low Mar.28). On the upside, the next hurdle aligns at 126.00 (10-day SMA) followed by 126.80 (high Apr.17) and finally 127.50 (2019 high Mar.1).
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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.