- EUR / JPY broke above the 130.00 level initially.
- The improved tone of the dollar weighs on the risk complex.
The resumption of buying interest in the dollar is putting the European currency and its peers under further pressure at the end of the week.
EUR / JPY weakened by EUR sell-off
After hitting new 2021 highs in the 130.30 / 35 area during early trading, the EUR/JPY came under moderate downward pressure due to renewed selling bias in the single currency.
In fact, the cross reached levels last seen in October 2018 above 130.00, although the move lost steam soon after.
The resumption of bullish traction in US yields gives the dollar additional oxygen and forces the cross to give up previous gains. In fact, yields on the key US 10-year bill hover around the 1.60% area, close to recent highs, after President Biden finally signed the $ 1.9 trillion fiscal stimulus package on Thursday.
On the agenda, the German final CPI rose 0.7% month-on-month in February and 1.3% in the last 12 months. According to additional data, industrial production in the euro zone overall expanded 0.8% in January.
Further on the US agenda, February producer prices should be supported by the leading indicator of the U-Mich index for the month of March.
Relevant levels
Right now, the cross is shedding 0.03% at 129.98 and a drop below 128.18 (March 2 monthly high) would target 127.30 (February 17 low) and finally 127.29 (50-day SMA). On the upside, the next resistance is at 130.34 (February 24, 2021 high) followed by 131.00 (psychological level) and then 131.98 (July 17, 2018 high).
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