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  • EUR/JPY drops below 116.00, recording fresh YTD lows.
  • The cross navigates levels last seen in April 2017.
  • EMU Producer Prices rose 0.2% MoM in July.

The persistent selling mood in the European currency has dragged EUR/JPY to fresh yearly lows in the 115.90/85 band on Tuesday.

EUR/JPY focused on risk trends, data

The cross is losing ground for the third session in a row in the first half of this week, briefly testing sub-116.00 levels for the first time in more than two years, always in response to the permanent offered bias around EUR and some buying mood lifting the Japanese safe haven.

Declining US yields are lending wings to the Japanese safe haven and are therefore undermining any potential rebound in the cross.

In the meantime, EUR remains well entrenched into the negative ground so far in tandem with rising expectations of extra easing by the European Central Bank to be delivered later this month.

In the docket, Producer Prices in Euroland rose at a monthly 0.2% during July and 0.2% over the last twelve months. Later in the day, the key US ISM manufacturing is expected to bring in some volatility to the markets.

EUR/JPY relevant levels

At the moment the cross is retreating 0.34% at 116.09 and a breakdown of 115.86 (2019 low Sep.3) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016). On the other hand, the next resistance is seen at 117.32 (10-day SMA) followed by 117.87 (21-day SMA) and then 119.87 (high Aug.6).