- The EUR / JPY rally lost steam just before 133.00.
- The dollar regains momentum thanks to the rebound in yields.
- The US Empire State New York index surprised to the upside in May.
The tone now offered on the European currency makes the EUR/JPY pull back further from the new 2021 highs, just below 133.00.
EUR / JPY look at risk trends
EUR / JPY advanced to new 2021 highs just a few pips below the key 133.00 level during early trading, all in response to the initial offered tone surrounding the dollar.
The subsequent rally in US yields gave the dollar a boost and put the European currency under selling pressure, triggering the corrective downtrend despite persistent bullish momentum in 10-year German Bund yields. .
On the euro agenda, the final Italian CPI rose 0.4% month-on-month in April and 1.1% over the previous year. In the US data sphere, the New York Empire State Index dropped slightly from the previous reading and came in at 24.30 for the month of May. The figure, however, exceeded expectations.
In Japan, producer prices increased more than estimated by 0.7% month-on-month and 3.6% year-on-year through April
Next on tap will be the NAHB index followed by TIC flows.
Relevant levels
So far, the cross is shedding 0.11% at 132.63 and faces the next support at 130.98 (May 5 weekly / monthly low) seconded by 130.45 (50-day SMA) and finally 129.58 (April 23 weekly low). On the other hand, an overcoming of 132.95 (maximum of May 17) would pave the way for a test of 133.00 (psychological obstacle) and then 133.13 (monthly maximum of September 21, 2018).
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