- EUR / JPY loses momentum near the 130.50 level.
- US ADP report disappointing estimates in August.
The EUR/JPY it now cuts part of the initial advance to new highs at 130.50 and falls back to the 130.20 region.
EUR JPY hurt by disappointing US data
The EUR / JPY saw its silver lining trim after the US ADP report surprised to the upside, hitting 374,000 for the month of August against an expected gain of more than 600,000 jobs.
The disappointing figures in the ADP report prompted a move in US 10-year benchmark yields to levels below the key 1.30% level, while triggering new selling pressure on the dollar against its major peers.
Earlier on the calendar, Japan’s capex expanded 5.2% year-on-year in the second quarter, while the manufacturing PMI dipped slightly to 527.7 in August. The manufacturing PMI fell slightly from preliminary readings in both Germany and the euro area. Furthermore, German retail sales contracted 5.1% month-on-month and 0.3% year-on-year through July. The ISM Manufacturing Index rose to 59.9 in August from 59.5, which was a positive surprise as the market consensus was for a pullback to 58.6.
Technical levels
So far, the cross is gaining 0.21% at 130.17 and a breakout of 130.44 (weekly high on September 1) would expose 130.67 (Fibonacci level) and then 131.07 (100-day SMA). On the downside, the next support comes at 129.28 (200-day SMA) followed by 127.93 (monthly low on August 19) and finally 127.00 (round level).
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