- Trump’s comments weigh on already thin risk tone.
- US-China trade talks are on the focus for now.
The EUR/JPY pair drops to the fresh low since January 04, at 123.00 now, during early Thursday. The pair initially reacted to pullback in global equities while latest moves might have been the result of the US President Trump’s comments.
The Euro (EUR) couldn’t enjoy upbeat industrial production data from Germany on Wednesday as market sentiment tilted towards risk aversion that helps the Japanese Yen (JPY).
Underlying factors for the earlier JPY strength could be hard statements from the US and China likely dimming prospects of the successful trade deal between them. Also affecting the pair could be the US-Iran rift that’s playing serious role to counter each other on various media.
While markets were already waiting for the details of the US-China trade talks, the US President Trump announced that China broke the deal at a rally of supporters. Mr. Trump also sounded hard on Venezuela and offered additional strength to the JPY.
With this, earlier thin chance of a trade deal between the US and China have got another roadblock and might negatively affect the trade sentiment.
Global risk barometer, 10-year treasury yield from the US, dropped more than 2 basis points to 2.46% on early-day.
It should be noted that no major data is up for release from either the Eurozone or Japan.
Technical Analysis
Having breached 123.00 support, the pair now can take rest at 122.50, failing to which can please bears with Jne 2017 lows near 122.35 and then 122.00.
Alternatively, an upside break of 123.00 should clear 123.70 to aim for 124.30 numbers to the north.
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