- The euro’s decline affects the EUR / JPY, which accelerates correction from highs in years.
- The euro has the worst week since March against the yen.
The EUR / JPY broke below 133.60 and extended the decline to 133.30, hitting the lowest level in a week. In this way, the crossing accelerates the correction after having climbed to 134.12 on Tuesday, the maximum since February 2018.
The decline in the EUR / JPY may be a sign of a possible consolidation or extension of the correction after several weeks with a steady bullish run. For now, the current week’s reversal of the crossover is the largest since March of this year.
The negative tone has to do with a weakness of the euro, caused by the decline of the EUR / USD. On Friday in turn, the downward correction of the USD / JPY was added. The stability in the yields of the Treasury bonds propitiated the movements in the mentioned pair.
The US employment report to be released at 12:30 GMT may have a large impact on the EUR / JPY. There are factors that can play limited tours. Should the market perceive positive data, boosting Treasury yields, it would be a supportive factor for the EUR / JPY on the side of the weakness of the yen, but at the same time, it could lead to further falls in EUR / USD, which has been the dominant factor in the recent EUR / JPY rallies this week. In turn, a rise in stocks should offer support to the crossover.
The Dominant trend remains clearly bullish in EUR / JPY, but there is room for major corrections without putting the dominant management at risk. The most relevant upcoming supports can be seen at 133.10 and then 132.45.