EUR/JPY struggles for direction near 118.00 ahead of NFP

• EUR/JPY trims earlier gains and returns to the 118.00 area.
• EMU Q2 GDP came in at 0.2% QoQ and 1.2 YoY.
• US Payrolls expected at around 160K for the month of August.

The softer note around the European currency is favouring some downside pressure in EUR/JPY to the 118.00 neighbourhood.

EUR/JPY now looks to data

The cross is now losing some upside momentum after two consecutive daily advances, coming up from fresh YTD lows in the 115.85/80 band recorded on Tuesday.

The cross has managed to climb to the vicinity of 118.30 earlier in the session, although the up move lacked of follow through, particularly after EUR-sellers resurfaced in the wake of poor German data.

In fact, Industrial Production in Germany contracted 0.6% MoM during July, while final GDP figures in the broader euro area saw the economy expanded 0.2% QoQ and 1.2% YoY in the April-June period. Employment figures in Euroland rose 0.2% QoQ during the same period.

Later in the session, the US Non-farm Payrolls are expected to come in at 160K for the month of August, while the speech by Fed’s Powell is coming up next.

EUR/JPY relevant levels

At the moment the cross is advancing 0.01% at 117.99 and faces the next up barrier at 118.61 (monthly high Sep.5) seconded by 119.58 (high Aug.13) and then 119.78 (55-day SMA). On the other hand, a breach 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).