EUR / JPY falls to weekly lows around 131.50

• EUR / JPY further extends the recent break below 132.00.
• Key support emerges at the 130.00 level (June 21).

The better mood of the dollar weighs on the space associated with risk and forces the EUR/JPY to retreat toward 131.50, or multi-day lows.

EUR / JPY looks at the US economic agenda.

The EUR / JPY pair loses ground for the fourth consecutive session in Tuesday’s change in trend, as the selling bias in the European currency, and the rest of the risk pairs, gained traction.

The dollar manages to regain a new pace amid growing caution among investors ahead of the June non-farm payroll release (Friday). The dollar rally comes despite the stable and persistent behavior of US yields, with the US 10-year benchmark trading around 1.50% for yet another session.

So far, market participants continue to weigh the ongoing vaccination campaign against the rapid and unexpected recovery in cases of the Delta variant of the coronavirus, fueling rumors of possible lockdown measures in some economies.

Regarding data in the euro zone, flash inflation figures in Germany for the month of June showed that the CPI is expected to rise 0.4% month-on-month and 2.3% year-over-year. In Japan, the unemployment rate rose slightly to 3.0% in May, the jobs / applications ratio was unchanged at 1.09 and retail sales surprised to the upside after expanding 8.2% in one year through May.

Relevant levels

So far, the cross is retreating 0.24% at 131.55 and faces the next support at 130.76 (100-day SMA) followed by 130.04 (monthly low on June 21) and then 129.58 (monthly low on April 23). On the other hand, an exceedance of 132.32 (50-day SMA) would point to 132.69 (June 23 high) and finally 134.12 (June 1, 2021 high).