EUR / JPY is under pressure near 130.50, watch out for the FOMC Minutes

• The EUR / JPY cross extends the downward movement to 130.50.
• Risk aversion is prevalent in global markets so far.
• Investor attention is expected to be on the FOMC Minutes.

Persistent risk aversion keeps the dollar propped up and put the EUR/JPY under further downward pressure on Wednesday.

EUR / JPY faces the next support around 130.00

EUR / JPY is losing ground for another session and the recent breakout of the 100-day SMA (131.00) and the round level of 131.00 appears to have opened the door for a deeper pullback towards June lows at the 130.00 zone.

The strong resurgence of the delta variant of the coronavirus, market buzz about the likelihood of further tightening measures in many economies, and softer-than-anticipated data outcomes on both sides of the ocean have been putting the risk space under a strain. additional downward pressure in past sessions.

Turning to euro zone data, German industrial production extended the April contraction to May (0.3% month-on-month), adding to Tuesday’s poor results from the ZEW survey.

Later on Wednesday, market participants are expected to closely follow the release of the FOMC Minutes from the June meeting, where the center of the debate is around the rumor about putting the reduction and possible increases of Interest rates.

Technical levels

So far, the cross is retreating 0.02% at 131.63 and faces the next support at 131.27 (June 30 weekly low) followed by 130.94 (100-day SMA) and then 130.04 (June 21 monthly low). On the other hand, an overcoming of 132.43 (monthly maximum of July 1) would point to 132.69 (weekly maximum of June 23) and finally to 133.00 (round level).