- Combination of factors pushes EUR / JPY lower, which has its worst day in weeks.
- Next support looms at the 130.00 area.
The EUR / JPY is losing almost a hundred pips on Monday, after accelerating the decline in recent hours. The cross had reached in the Asian session up to 131.35 and recently reached the lowest level in six days at 130.37. It is trading at 130.40, with a negative tone in the very short term.
Monday’s slide is putting the EUR / JPY back below the 200-day moving average. The losses occur after the cross failed to assert itself above 131.50. The correction could extend to 130.15, which is where the next strong support zone is, followed by 129.75.
The fall is due to a strengthening of the yen, in the context of a fall in the equity markets. LThe futures of the main Wall Street indices point to an open with falls around 0.50%. In turn, Treasury yields are experiencing a slight decline, from highs in months, reinforcing the current momentum of the yen.
For its part, the euro is among the weakest in the G10 on Monday. In addition to falling against the yen, it is losing ground against the pound (EUR / GBP near the 0.8330 floor) and the dollar.
What happens to Treasuries and equity markets will continue to be key to the crossover. The rally appears to be exhausted in EUR / JPY and the question is how far the correction could extend. A return above 131.00 could ease the downward pressure.
Technical levels
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