EUR/JPY fails to recover and hits 1-week lows
- Euro unable to hold to gains, back near key support.
- Yen gained momentum amid falling US bond yields.
The EUR/JPY pair failed today to recover ground and approached a critical support level. It continues to move in a wide range but with downside risks growing.
Earlier today the pair reached at 132.40 a daily high before turning to the downside. Not even a better-than-expected reading in the retail sales report from the Eurozone helped the euro. During the American session, it bottomed at 131.82 amid a stronger yen.
The Japanese currency gained momentum amid an ongoing rally in Treasuries. The 10-year yield dropped to the lowest since October 19 at 2.30%. While the euro holds the bearish tone that prevails since the last ECB meeting.
Like EUR/JPY, EUR/GBP approaches a relevant support level, and at the same time, EUR/USD has already moved below October lows, increasing downside risks in euro’s crosses. If the euro drops further against the US dollar that could drive EUR/JPY sharply lower.
At the moment of writing, EUR/JPY is trading at 131.90/95, down marginally from yesterday’s closing price. The area around 131.80 is a key level on a daily basis: a close below would open the door to more losses, with a potential target near 130.50. Price traded last week under 131.80 but avoid closing below.
To the upside, the pair faces resistance at 132.40 (Nov 7 high / Oct 19 low) and then at 132.85 (Nov 1 high) and 133.15 (last week high).