EURJPY under pressure, tests 144.00 as yen soars broadly

• The Japanese yen soars after the US CPI figures on expectations of a less aggressive Fed.
• The dollar falls, the USDJPY loses more than 400 points.
• EURJPY is testing critical support at 144.00.

The crossing EURJPY is suffering the biggest daily decline in recent months due to the strength of the Japanese yen across the board and lower yields in the US. It has bottomed at 143.98, the lowest since October 24.

The October CPI in the US showed figures below expectations and caused a recovery in Wall Street and in the Treasuries. The sharp drop in US yields strengthened the Japanese yen, the best performer on Thursday, with USDJPY falling more than 450 points.

Acceleration below 144.00?

EURUSD recovery keeps EURJPY losses limited. The cross is testing a critical support zone around 144.00. A break down would open the doors to more losses. The euro needs to maintain that level to avoid deteriorating the already negative technical outlook.

To the upside, resistance on the EURJPY emerges at 145.50; although the cross needs to rise and hold above 147.00 for the euro to strengthen. If EURUSD continues to rise and risk appetite prevails, the ongoing correction could find some reason to slow down. A resumption of the uptrend would require US yields to turn higher again.

EURJPY daily chart

Technical levels