EUR / JPY offered turns negative below 132.00

  • The daily rise of the EUR / JPY falters near the 132.50 level.
  • Risk aversion underpins demand for the Japanese yen.
  • The volatility tracked by the VIX index rises to 2-day highs.

Following a move to the 132.50 region during early trading, the EUR/JPY it has come under moderate selling pressure and is now back in the area below 132.00.

EUR / JPY cuts earnings on risk aversion

Sellers appear to have made a comeback to EUR / JPY, dragging it to the 132.00 zone following the spike in risk-off mood, which in turn gives additional wings to buying pressure on the Japanese safe haven.

Collaborating with the latter, volatility continues to rise and raises the VIX index (also known as “the panic index”) to new 2-month highs near 20.00.

Indeed, market buzz about the resurgence of inflationary fears appears to be behind the spike in risk aversion and consequent demand for the Japanese currency, putting the EUR / JPY under renewed downward pressure, with the increased volatility simply accompanying.

Turning to Tuesday’s data, the ZEW survey for the month of May showed that economic sentiment in both the euro zone and Germany improved further. In Japan, household spending expanded 7.2% in March, while the 10-year JGB auction rose to 0.070% (from 0.123%).

Technical levels

So far, the crossing is losing 0.08% at 131.85 and a breakthrough of 132.52 (May 10, 2021 high) would pave the way for a test of 133.00 (psychological hurdle) and then 133.13 (monthly high). September 21, 2018). On the other hand, immediate containment is located at 130.98 (weekly / monthly minimum of May 5), followed by 130.18 (50-day SMA) and finally 129.58 (weekly minimum of April 23).

.

You may also like