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EUR/JPY recedes from tops, rangebound above 123.00

  • The up move in the cross stalled around 123.60.
  • Yen demand keeps bullish attempts contained.
  • EMU advanced CPI came in below estimates in December.

After moving to fresh 2-day peaks at 123.60, EUR/JPY met some sellers and has now receded to the 123.20 region, where it is looking to consolidate ahead of key US data.

EUR/JPY looks to risk trends, data

Following Wednesday’s ‘flash crash’ in the Japanese safe haven that dragged the cross to the 119.00 region, the cross managed to regain some composure and advance to the current 123.00 barrier and above soon afterwards.

Risk-off sentiment has been prevailing during the first sessions of the new year in response to increasing concerns over a global slowdown, particularly after Chinese manufacturing PMI slipped back into contraction territory during December.

Today’s lower-than-expected flash inflation figures in the euro bloc for the last month of 2018 also poured some cold water to the strong rebound from recent multi-month lows.

Looking ahead, key US Non-farm Payrolls are coming up next seconded by the speech of Fed’s Jerome Powell.

EUR/JPY relevant levels

At the moment the cross is gaining 0.49% at 123.22 facing the next up barrier at 123.60 (low Jan.4) seconded by 124.98 (10-day SMA) and finally 126.62 (21-day SMA). On the other hand, a breakdown of 121.29 (low Jan.3) would aim for 118.97 (2019 low Jan.2) and then 118.24 (monthly low Feb.27 2017).

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