- EUR/JPY is down for another session and challenges 122.00.
- JPY gains ground on declining US yields.
- German Retail Sales, EMU Producer Prices surprised to the downside.
The pick up in the demand for the Japanese safe haven is dragging EUR/JPY to the boundaries of the key support at 122.00 the figure, where some decent support turned up.
EUR/JPY upside capped by 123.50
The cross – considered a benchmark for the performance of the risk appetite trends – is retreating for the second day in a row on the back of the renewed buying pressure around the JPY.
In fact, yields of the US 10-year note keep declining today and are approaching the critical support at 2.0%, sustaining at the same time the appreciation of the Japanese currency.
Data wise, German Retail Sales extended the negative mood for another month in May, while Producer Prices in Euroland rose less than expected during the same period.
Later in the day, FOMC’s J.Williams and L.Mester are due to speak. Yesterday, VP R.Clarida said many members favour a more accommodative stance in the near term, emphasizing that price stability, a strong labour market and economic growth remain a priority for the Committee.
EUR/JPY relevant levels
At the moment the cross is gaining 0.02% at 122.40 and faces the next hurdle at 123.04 (55-day SMA) seconded by 123.35 (high Jul.1) and finally 123.75 (high May 21). On the other hand, a breakdown of 121.65 (low Jun.25) would expose 120.95 (low Jun.21) and then 120.78 (low Jun.3).
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