- EUR / JPY weakness has retested recent lows around the 128.00 level.
- The new strain of COVID weighs heavily on investor confidence.
- The Japanese yen rises along with risk aversion.
Strong buying interest around the Japanese yen puts the EUR/JPY under additional pressure at the levels below 129.00 so far on Friday.
EUR / JPY weakened by COVID headlines
The EUR / JPY is down for the third session in a row and challenged the area of ​​recent highs at the 128.00 zone on Friday, although it managed to regain some bullish traction soon after.
The risk-off mood stormed markets at the end of the week in response to the resurgence of coronavirus concerns, all after a new variant appeared in southern Africa. Fanning the flames, this new variant comes at a time when COVID cases are already increasing at a rather alarming rate in the old continent.
The prevailing risk aversion gives additional oxygen to the Japanese safe haven demand, while the moderate decline in US yields sponsor the dollar’s daily pullback.
On the euro agenda, German import prices rose more than was estimated in October: 3.8% month-on-month and 21.7% year-on-year. Furthermore, the ECB’s M3 money supply expanded at an annualized 7.7% during October.
Technical levels
So far, the cross is losing 0.63% at 128.40 and a breakout of 129.59 (Nov. 23 weekly high) would expose 130.04 (100-day SMA) and then 130.54 (200-day SMA). On the downside, the next support comes at 127.97 (November 19 monthly low) followed by 127.93 (September 22 monthly low) and finally 125.08 (January 18, 2021 low).
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
