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  • EUR/JPY is falling for the second straight day on Tuesday.
  • The cautious market mood helps JPY stay strong against its rivals.
  • Surging number of coronavirus cases in Europe could continue to weigh on EUR.

The EUR/JPY pair lost nearly 50 pips on Monday and continued to push lower on Tuesday with the JPY finding demand as a safe-haven and staying resilient against its peers. As of writing, the pair was trading at fresh daily lows at 123.47, losing 0.24% on a daily basis.

Dismal market mood hurts EUR

Investors remain concerned over the possibility of nationwide lockdowns in Europe as countries struggle to control the spread of the coronavirus. Earlier in the day, Italy posted its highest one-day increase of 21,994, France announced 33,417 new confirmed cases with 523 fatalities and the UK reported 22,885 new infections. 

More importantly, according to several news outlets, French President Emmanuel Macron will deliver a national address and will likely announce additional measures on Wednesday. Moreover, Dutch Prime Minister Mark Rutte is reportedly considering a nationwide lockdown.

Reflecting the risk-averse market environment, Germany’s DAX, the Euro Stoxx 50 and the UK’s FTSE 100 indexes all lost around 1%. 

Meanwhile, with the 10-year US Treasury bond yield is down nearly 3% on Tuesday, the JPY is preserving its strength in the second half of the day and allowing the bearish pressure to remain intact.

Technical levels to watch for