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  • EUR/JPY extends the rejection from 120.00, drops near 119.20.
  • JPY remains bid despite steady US yields.
  • EMU’s Economic Sentiment dropped further in October.

The selling mood around the European currency is putting EUR/JPY under extra downside pressure around he 119.20 region, or weekly lows.

EUR/JPY looks to yields, trade

The cross is prolonging the negative start of the week and is extending the move lower after being once again rejected from the critical resistance barrier at 120.00 the figure. This important hurdle is also reinforced by the proximity of t he 100-day SMA in the 119.80 zone.

The increasing buying interest around the Japanese safe haven has been also weighing on the cross today in spite of the consolidative mood from the key US 10-year note around the 1.70% area.

In the data space, the Economic Sentiment in both Germany and the broader euro area worsened for the current month according to the latest ZEW survey to -22.8 and -23.5, respectively. Despite the negative reading, both prints surpassed expectations.

In the meantime, investors keep looking to developments from the US-China trade front, particularly after the recently clinched partial agreement in Washington, which it seems nobody has much faith in it”¦

EUR/JPY relevant levels

At the moment the cross is losing 0.27% at 119.20 and a breach of 118.25 (55-day SMA) would expose 117.07 (monthly low Oct.3/7) and then 116.56 (low Aug.26). On the upside, the next barrier aligns at 120.00 (monthly high Oct.11) seconded by 120.01 (monthly high Sep.13) and finally 122.32 (200-day SMA).