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  • EUR/JPY edges lower in the European session on Monday.
  • EUR remains under pressure amid USD strength and risk aversion.  
  • ECB President Christine Lagarde’s speech will be in focus.

The EUR/JPY price continues to drift lower in the early European session. The pair opens at a higher level, albeit fizzles out rather quickly,  and refreshes the multi-month on Monday. The rapid selling action in the previous week erases previous two month gains in a matter of a few days.

As of writing, EUR/JPY is trading at 130.26, down 0.38% for the day.

Investors continue to digest the Fed hawkish outlook on inflation and interest rates. The central bank’s sudden aggressive U-turn pushes the greenback higher against the majors.  

The shared currency failed to capitalize the gains on the strong economic numbers, and positive comments from the ECB President Christine Lagarde on weekends which said that progress on strategy overhaul is good so far.

The Euro struggled despite the higher Consumer Price Index (CPI) in May, which beat the market expectations and rose 1% YoY basis.

ECB pledged to continue with its bond buying program despite the raised economic outlook. This signaled some doubts among the policymakers over the pace of economic recovery.

On the other hand, the Bank of Japan (BOJ) announced an extension of its pandemic-relief program and kept its monetary policy unchanged. The yen gains on its traditional safe-haven asset appeal.

As for now, investors are gearing up for the ECB President Lagarde speech to gauge the market sentiment.

EUR/JPY additional levels