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  • EUR/JPY records new 2021 highs, retreats afterwards.
  • US yields come under pressure and drag the dollar lower.
  • Initial Claims rose by 473K, Producer Prices rose 0.6% MoM.

After recording new YTD highs in the 132.70/75 band earlier in the session, EUR/JPY came under some selling pressure on Thursday.

EUR/JPY stays supported near 132.00

EUR/JPY extends the weekly advance well past the 132.00 yardstick and visits the area last seen in September 2018 beyond 132.70.

The strong pick-up in US yields re-ignited the selling bias around the Japanese yen, all rendering in further upside traction in EUR/JPY.

Indeed, US inflation figures for the month of April came in stronger than initially estimated, fueling further the market chatter regarding higher inflation in the next months and lifting US 10-year yields back to the 1.70% area.

Nothing scheduled in the euro docket on Thursday left all the attention to the US calendar: Initial Claims rose by 473K during last week, headline Producer Prices gained 0.6% MoM in April and 6.2% from a year earlier, while Core prices rose 0.7% inter-month and 4.7% vs. April 2020.

EUR/JPY relevant levels

So far, the cross is gaining 0.10% at 132.43 and a surpass of 132.73 (2021 high May 12) would pave the way for a test of 133.00 (psychological hurdle) and then 133.13 (monthly high Sep.21 2018). On the flip side, immediate contention is located at 130.98 (weekly/monthly low May 5) seconded by 130.31 (50-day SMA) and finally 129.58 (weekly low Apr.23).

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