- The selling pressure around EUR drags the cross lower.
- The mood around JPY remains bid and adds to the downside.
- EMU final April CPI matched preliminary figures. Core CPI ticked higher.
The bid tone around the Japanese safe haven in combination with the pessimism surrounding the single currency is driving EUR/JPY to fresh lows in the 122.40 region.
EUR/JPY looks to trade, risk-trends
The weakness around the cross has been picking up pace as of late against the backdrop of rising fears over the US-China trade dispute plus renewed political effervescence in Italy.
In fact, trade concerns remain steady - to say the least - despite the lack of fresh headlines from the still ongoing negotiations, while recent comments from Lega Nord’s leader M.Salvini have reignited the struggle between Rome and Brussels with fiscal spending and EU rules in the centre of the debate.
In today’s docket, final April inflation figures in Euroland gauged by the CPI matched the preliminary readings, although Core prices ticked higher to 1.3% YoY (from 1.2%).
EUR/JPY relevant levels
At the moment the cross is retreating 0.25% at 122.41 and a breach of 122.08 (low May 15) would aim for 120.54 (monthly low Jan.17 2017) and then 118.82 (2019 low Jan.3 ‘flash crash’). On the other hand, initial resistance aligns at 123.04 (10-day SMA) followed by 123.61 (high May 10) and finally 124.06 (21-day SMA).
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