- The rise of the EUR / JPY is exhausted near 133.70.
- The final German CPI rose 0.5% monthly and 2.5% year-on-year in May.
- US retail sales contracted more than expected in May.
A slight upward pressure on the United States dollar has weighed slightly on sentiment around the common currency, forcing the cross EUR / JPY to retreat from previous highs near 133.70.
EUR / JPY continues to target 2021 highs above 134.00
The EUR / JPY cross seeks to extend Monday’s moderate advance well above the level of 133.00Although the imminence of the FOMC meeting motivates investors to remain cautious.
Market participants continue value or recent higher than expected US CPI consumer pricesAlthough the Fed’s view that the current higher inflation is temporary appears to be gaining traction, which could undermine the occasional strength in the dollar.
Earlier in the day, euro zone data has shown that the German CPI rose 0.5% monthly and 2.5% year-on-year until May.
On the American calendar, Retail sales surprised to the downside in May after contracting 1.3% MoM. Other data showed that the Empire State Manufacturing Index fell to 17.4 (from 24.3), IPP producer prices gained 0.8% over the past month, industrial production expanded 0.8% month-on-month in the same period, and capacity utilization improved to 75.2% (from 74.6%).
Relevant EUR / JPY levels
At the time of writing, the crossing EUR/JPY is gaining 0.05% on the day, trading at 133.45. A break above 134.12 (2021 high), would pave the way for a test of 134.40 (September 2017 maximum) and 134.50 (October 2017 peak). On the other hand, the next support is at 132.64 (June 14 low), followed by 132.52 (minimum of May 24) and finally 131.64 (minimum of May 12).
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