- USD / JPY advance limits EUR / JPY decline.
- Bounce in stocks favors the euro’s rebound against the yen.
The EUR / JPY is trading near 126.30, after falling to 126.08, the lowest level in a week. The decline occurred in a context of a strong rise in the dollar and a decline in the stock markets. The cross maintains a downward trend in the short term, holding above 126.00.
The euro is falling against the dollar and shows marked weakness after the EUR / USD had broken below 1.2000. ANDThis pushed the EUR / JPY down. The rise in US Treasury yields weakened the yen, boosting USD / JPY significantly. The price of this pair exceeded 105.00 and reached the 105.30 area.
The USD / JPY rally limited the fall of the EUR / JPY which found support above the 126.00 zone. If that level gives way, the weakness could extend to the next support located at 125.70 / 80. In the opposite direction, a rally above 126.50 would ease the very short-term bearish bias.
In terms of data, there was an increase in retail sales in the Eurozone of 2% in December. This number was better than expected (1.6%), and represented a rebound after the fall of 5.7% in November (revised up from -6.1%). Prior to this, in the quarterly bulletin, the European Central Bank indicated that production possibly contracted in the fourth quarter. In Japan the December consumer spending report will be released on Friday.
Technical levels
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