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  • EUR/JPY consolidates recent losses in a 10-pips trading range.
  • Market sentiment dwindles amid stimulus, vaccine news and hopes of no tapering.
  • German Consumer Confidence, ECB policymakers’ speeches and virus updates from Japan will be the key.

EUR/JPY remains subdued near 133.00, mid-way to the recent range, as markets in Tokyo opens for Thursday’s trading. In doing so, the cross-currency pair struggles for a clear direction amid a light calendar and thin feed while probing the sellers.

The ECB policymaker Fabio Panetta joined the league of central bankers that recently rejected tapering. However, the EUR/JPY pair seems to have weighed down on the US dollar’s recovery moves, playing contrary to the European currency, amid the jump in the Treasury yields. That said, the US 10-year Treasury yields rose for the first time in the last five days as traders take a breather from reflation fears.

The US Food and Drug Administration’s (FDA) emergency use authorization (EUA) to the COVID-19 antibody treatment developed by Vir Biotechnology Inc. and GlaxoSmithKline offers an extra positive for the risk-on mood. However, chatters surrounding China’s commodity crackdown and Japan’s extension of emergencies in the key prefectures probe the bulls.

It’s worth mentioning that Nikkei came out with the news suggesting the Japanese government’s readiness to stretch job benefits until July-end, which in turn helps the risk catalyst and should have favored EUR/JPY buyers but could not.

Against this backdrop, S&P 500 Futures search for fresh direction after Wall Street benchmarks closed with modest gains whereas the US 10-year Treasury yields keep the previous day’s recovery moves. Further, Japan’s Nikkei 225 begins the day with mild losses of around 28,560.

Looking forward, a lack of catalysts in Asia could keep pushing EUR/JPY traders to wait for the German consumer sentiment figures and speech from Buba President Jens Weidmann as well as ECB Vice President Luis De Guindos to confirm the recent bullish bias of ECB. On confirming the same, EUR/JPY can reverse the previous day’s losses.

Technical analysis

Unless breaking 10-day SMA and a three-week-old support line, around 132.95-90, EUR/JPY sellers may not risk staying on the board.

 

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