EUR/JPY drops more than 100 pips in Asia, trades below 120.00
- EUR/JPY drops sharply in Asia as EUR/USD fails to benefit from broad-based dollar weakness.
- Dollar takes a beating due to labor market concerns, risk-on in the equity markets.
The anti-risk Japanese yen has gained considerable ground in Asia, pushing EUR/JPY to session lows near 119.60 amid the broad-based US dollar weakness and decline in the US stock futures.
MA support breached
The pair violated the 200-day average support at 120.00 a few minutes before press time and is currently trading near 119.82, representing a 0.84% decline on the day, having hit a high of 120.94 in early Asia.
The cross is flashing red as USD/JPY pair is down 1.1%, while EUR/USD is struggling to benefit from the strong offered bias around the greenback.
Markets are selling the dollar, possibly in response to the US fiscal stimulus and the resulting risk-on in the equity markets. The Dow Jones Industrial Average surged by over 1,000 points on Thursday. Meanwhile, the Asian stocks are reporting solid gains as of writing.
Also, concerns regarding the labor market could be weighing over the greenback. The single currency, however, has so far failed to capitalize on the dollar weakness, possibly due to the worsening situation across the Eurozone.
Spain’s coronavirus death toll officially passed China’s, becoming the second-highest in the world. The health system is collapsing underneath the weight of the disease and the economy will follow. In Italy, the death toll rose above 7,000 on Thursday, noted BK Asset Management's, Kathy Lien.
All in all, there is little positive news on the domestic front to support the common currency.