- EUR/JPY tumbles further and tests 117.50, fresh YTD lows.
- The cross trades in levels last seen in April 2017.
- US-China trade fears props up the demand for JPY.
The increasing demand for the Japanese safe haven is sending EUR/JPY to the mid-117.00s, recording fresh yearly lows at the same time in levels last traded in April 2017.
EUR/JPY weaker on trade concerns
The unabated ‘fly-to-safety’ stance in the global markets keeps bolstering fresh and increasing inflows into the safe haven Yen and thus dragging the cross lower, always with the focus of attention on the US-China trade war and despite the lack of fresh headlines on that front in past hours.
Mood among traders deteriorated further after President Trump has practically ruled out a deal with China late on Friday, although trade talks are still expected to resume at some point in the next month, this time in the US.
In the meantime, political jitters in Italy add to the sour mood in the risk trends, although EUR appears somewhat insulated from those concerns amidst supportive ‘repatriation’ flows, at least in the very near term.
Moving forward, the German ZEW survey will grab all the attention tomorrow ahead of Wednesday’s advanced GDP figures in both Germany and the broader Euroland. In Japan, Tertiary Industry Activity Index is only due tomorrow.
EUR/JPY relevant levels
At the moment the cross is losing 0.61% at 117.63 and a breakdown of 117.51 (2019 low Aug.12) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016). On the upside, the next hurdle is located at 119.03 (10-day SMA) seconded by 119.87 (high Aug.6) and then 120.07 (21-day SMA).
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