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EUR/JPY accelerates the downside below 119.00

  • Daily gains in EUR/JPY faltered around 119.70 on Tuesday.
  • Japan plans to pump in around ¥60 trillion to fight COVID-19.
  • EMU’s flash CPI seen rising 0.5% MoM during March.

The increasing selling bias in the European currency is forcing EUR/JPY to shed further ground and break below 119.00 the figure on Tuesday.

EUR/JPY met resistance around 119.70

After advancing to daily highs in the 119.70 region during early trade, sellers stepped in and dragged EUR/JPY back to the area below the 119.00 mark at the time of writing.

In the meantime, the cross is struggling for direction following two consecutive daily pullbacks amidst the recovery in the greenback and increased selling pressure in the yen, particularly after news cited the government could inject around ¥60 trillion in the form of a stimulus package to combat the impact on the domestic economy of the coronavirus fallout. This package could be announced early next month.

Also a consequence of the rebound in the buck, the shared currency keeps losing momentum and recedes further from recent weekly tops, collaborating at the same tome with the downbeat mood in the cross.

In the docket, advanced inflation figures in the broader Euroland see the headline CPI rising at a monthly 0.5% in March and 0.7% over the last twelve months. Earlier in the session, the German jobless rate ticked lower to 5.0% for the current month along with an increment of just 1K in the Unemployment Change during the same period.

EUR/JPY relevant levels

At the moment the cross is losing 0.29% at 118.66 and a drop below 118.37 (monthly low Feb.28) would expose 116.36 (2020 low Mar.9) and then 115.86 (2019 low Sep.3). On the other hand, the next resistance lines up at 119.99 (200-day SMA) followed by 121.14 (monthly high Mar.25) and finally 121.39 (weekly high Feb.20).

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