EUR/JPY on the defensive near 126.00 ahead of US data

• EUR/JPY fades the earlier uptick to the 126.50 area.
• EMU’s flash Q2 GDP came in at -12.1 QoQ, in line with consensus.
• US Retail Sales expanded 1.2% MoM in July.

The renewed buying interest in the Japanese safe haven is forcing EUR/JPY to give away initial gains near 126.50 and retreat to the 126.00 neighbourhood at the time of writing.

EUR/JPY offered ahead of data

The upside pressure around the Japanese safe haven keeps EUR/JPY under pressure on Friday, prompting the cross to abandon the area of recent 2020 highs (Thursday).

The bid bias in the yen comes amidst the recent move up in yields of the key US 10-year note, which managed to advance past the 0.70% level, or 2-month tops.

In the euro calendar, preliminary GDP figures in the euro region now see the economy contracting more than 12% during the April-June period and around dropping around 15% on an annualized basis.

In the US calendar, headline Retail Sales expanded at a monthly 1.2% during July and core sales expanded 1.9% MoM. Later in the session, US Industrial Production figures are due seconded by the flash estimate of the Consumer Sentiment for the current month.

EUR/JPY relevant levels

At the moment the cross is losing 0.26% at 125.97 and a drop below 124.28 (low Aug.11) would aim for 122.87 (monthly high Jan.16) and then 121.14 (monthly high Mar.25). On the other hand, the next hurdle aligns at 126.75 (2020 high Aug.13) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1).