- The EUR / JPY rally faltered once again at the low of 130.00.
- Falling yields in the United States favor demand for the yen.
- Markets attention will be on the US calendar later in the session.
The improved tone in the dollar weighs on the sentiment surrounding the European currency and contributes to the downward correction of the EUR/JPY at the turnaround on Tuesday.
EUR / JPY focuses on risk trends, US data
After two consecutive daily rallies, the EUR / JPY now loses control and retreats to the area below the key psychological level 130.00 amid resumption of demand for dollars and falling US yields.
Indeed, risk aversion appears to have returned to the markets, forcing riskier assets to shed some of the recent advance, while market participants remain somewhat cautious ahead of Wednesday’s FOMC event.
Later in the record, investors’ attention will be on the release of the key Consumer Confidence measured by the Conference Board and Durable Goods Orders seconded by home prices and the Richmond Fed Index.
At the beginning of the session, the ECB’s M3 money supply expanded 8.3% year-on-year through June, while loans to the private sector expanded 4.0% year-on-year.
Technical levels
So far, the cross is gaining 0.32% to 129.84 and a breakout of 130.35 (weekly high on July 26) would expose 130.67 (38.2% Fibonacci from the January-June rally) and then 131.08 (weekly high on July 13). July). On the downside, immediate support is located at 128.59 (monthly low on July 20), followed by 128.54 (61.8% Fibonacci from the January-June rally) and finally 128.50 (200-day SMA).
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