- EUR/JPY loses upside momentum, back around 121.00.
- EUR-selling behind the correction lower in the cross.
- Focus remains on Brexit, US-China trade talks.
The now softer stance in the European currency is prompting EUR/JPY to abandon the area of recent peaks in the mid-121.00s.
EUR/JPY focused on risk trends
The cross met important resistance in the mid-121.00s on Monday, or new 3-month tops, area coincident with the late July peaks.
Renewed uncertainty stemming from the Brexit process, particularly since the Parliament’s vote on Saturday has been weighing on the broad risk appetite trends and lent some extra legs to the Japanese safe haven and the buck.
In addition, cautiousness among investors has started to swell in light of the upcoming ECB event (Thursday) – the last meeting under President Draghi – and amidst the prevailing consensus that the Council could deliver a dovish message.
No news on the US-China trade front other than the usual suspects leaves yields and thus the Japanese JPY on a consolidative/bearish view.
EUR/JPY relevant levels
At the moment the cross is losing 0.10% at 120.97 and a breach of 119.78 (100-day SMA) would expose 118.43 (55-day SMA) and finally 117.07 (monthly low Oct. 3/7). On the other hand, the next up barrier aligns at 121.47 (monthly high Oct.21) seconded by 122.23 (200-day SMA) and then 123.35 (monthly high Jul.1).
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