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  • EUR/JPY meets further weakness below the 118.00 handle.
  • Traders keep digesting recent US-China positive headlines.
  • Bearish momentum around EUR gathers pace.

The selling impulse around the European currency is picking up extra vigour in the second half of the week and is dragging EUR/JPY to challenge the area of 3-week lows near 117.50.

EUR/JPY weaker on EUR-selling

Recent positive comments from President Trump hinting at the likelihood that a trade agreement could be closer than expected have boosted US yields and the selling mood in the Japanese safe haven. The move, however, appears short-lived and both assets are now attempting a consolidative move.

However, unabated EUR weakness continues to put the cross under extra downside pressure and is now trading at shouting distance from the 117.50 area, or multi-week lows.

EUR has intensified the downside today despite another (tepid) improvement in the German docket saw the Consumer Climate gauged by GfK ticking higher to 9.9 (from 9.7) for the month of October. Additional data in Euroland noted the ECB’s M3 Money Supply expanded above estimates once again, this time 5.7% on a year to August.

Later in the session, the final US Q2 GDP figures are due seconded by key flash trade data and a slew of Fed-speakers should keep USD-traders entertained.

EUR/JPY relevant levels

At the moment the cross is retreating 0.32% at 117.53 and a break below 1165.56 (low Aug.26) would expose 115.86 (2019 low Sep.3) and finally 114.85 (2017 low April.17). On the upside, the next resistance is located at 118.25 (21-day SMA) seconded by 118.94 (55-day SMA) and then 120.01 (monthly high Sep.13).