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EUR/JPY: Impulsive spike above 133.70 fades, back to square one

FXStreet (Mumbai) - The cross in the EUR/JPY recovered from lows and spiked to fresh session highs in early Asian trades, only to halt the recovery and now retreat to familiar ranges near 133.55 region.

EUR/JPY faces stiff hurdle ahead of 133.70

Currently, the EUR/JPY pair trades -0.12% lower at 133.55, having posted a day’s low at 133.49 and a day/s high at 133.74. The EUR/JPY cross remains in the red mainly driven by a weaker euro against the US dollar ahead of ECB Chief Draghi’s testimony due later today.

The latest Sept ECB meeting saw Draghi backing the case for further easing program which continues to keep the euro undermined all through this month.

Whilst, the downside in the cross remains cushioned amid a better bid USD/JPY as the greenback remains boosted on the recent hawkish comments from Fed officials, reiterating calls for rate hike this year.

In the day ahead, markets now await a raft of manufacturing PMI reports from across the euro area economies ahead of Draghi’s speech for further momentum on EUR/JPY.

EUR/JPY Technical Levels

To the upside, the next resistance is located at 133.74 (Today’s High) levels and above which it could extend gains to 134 levels. To the downside immediate support might be located at 133.27 (Sept 22 Low) below that at 132.92 (Sept 9 Low) levels.

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