EUR / JPY falls to daily lows, approaching 133.00

• EUR / JPY loses more ground and looks to test 133.00.
• The yen remains offered and weighs on the cross on Wednesday.
• The FOMC meeting will be the featured event later in the session.

Higher buying interest in the Japanese yen forces the EUR/JPY to retreat to the area of ​​new 2-day lows near the 133.00 criterion.

EUR / JPY looking towards the FOMC meeting

After two consecutive sessions closing with gains, the EUR / JPY is under some selling pressure due to renewed demand for the yen as a safe haven.

Stable US yields, along with the consolidation mood around the dollar and European currency and increasing caution ahead of the FOMC event, appear to have been lending further support to the JPY, putting the cross under a additional downward pressure at the same time.

On the calendar, the Japanese trade deficit narrowed to ¥ 187.1 billion in May, while machinery orders expanded 6.5% year-on-year through April. In the US, building permits contracted 3% monthly last month (1,681 million units) and housing starts expanded 3.6% from the previous month (1,572 million units).

Later, the Federal Reserve is seen to cling to the view that the recent spike in inflation is expected to be temporary, while the general tone is forecast to fall on the dovish side. Investors, however, will closely follow the updated “dot charts” and the Committee’s assessment of the economy.

Technical levels

So far, the cross is losing 0.22% at 133.13 and faces the next support at 132.64 (June 14 monthly low) followed by 132.52 (May 24 weekly low) and finally 131.64 (May 12 weekly low). On the positive side, an overshoot of 134.12 (June 1, 2021 high) would pave the way for a test of 134.40 (September 2017 monthly high) and then 134.50 (October 2017 monthly high).