- EUR/JPY is mildly bid, but struggling to get past the 50-day moving average (MA) of 129.43.
- German political uncertainty is likely capping gains – Merkel’s interior minister offers to resign.
The EUR/JPY is reporting marginal gains on JPY weakness, however, a convincing break above the 50-day MA hurdle of 129.43 remains elusive, likely due to German political uncertainty.
Chancellor Merkel’s Interior Minister Horst Seehofer, who favors tougher border control, has offered to quit and markets fear his resignation could make Angela Merkel’s future even more uncertain.
Consequently, the EUR/USD dipped to 1.1654 in Asia. However, the S&P 500 futures jumped 0.20 percent in early Asia and likely put a mild bid under the EUR/JPY pair.
At press time, the currency pair is trading at 129.40 – up 0.10 percent on the day and could turn negative if the European equities turn risk-off in response to German political risks.
EUR/JPY Technical Levels
Resistance: 129.43 (50-day MA), 130.36 (June 14 high), 130.45 (100-day MA).
Support: 129.07 (session low), 128.42 (5-day MA), 128.16 (10-day MA).
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