- EUR / JPY remains on the defensive near 131.00.
- Firm dollar amid stable US yields.
- The US ADP report disappointed estimates with 742,000.
The selling bias around the European currency puts the EUR/JPY under increased pressure and motivates him to challenge the key support at the 131.00 zone.
EUR / JPY focused on risk trends
The EUR / JPY slide navigates its second consecutive session so far Wednesday amid the persistent rally in the dollar, stable US yields and loss of momentum in the broad risk complex.
In fact, the dollar remains in a positive position despite flat activity in US yields, while it got additional oxygen from Yellen’s comments on Tuesday and the shift in investor focus on the US economic recovery.
On the agenda, the final German services PMI fell below 50.0 in April, while producer prices in the euro area rose 1.1% month-on-month in March and 4.3% over the last twelve months.
In the US, the ADP report showed that the US private sector added 742,000 jobs last month, slightly below forecasts (800,000). Later, the Non-Manufacturing ISM will take center stage.
Relevant levels
So far, the cross is shedding 0.07% at 131.17 and faces immediate containment at 130.98 (weekly low) seconded by 129.94 (50-day SMA) and finally 129.58 (April 23 weekly low). On the other hand, a pass of 132.36 (April 29 high) would pave the way for a test of 133.00 (psychological obstacle) and then 133.13 (September 21, 2018 monthly high).
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