EUR/JPY RECEDES FROM TOPS AND RETURNS BELOW 124.00

EUR/JPY recedes from tops and returns below 124.00

23 July 2020, 16:25

• EUR/JPY loses further momentum and drops below 124.00.
• Dollar regains ground and weighs on riskier assets.
• EMU’s Consumer Confidence next of relevance in the docket.

The now softer tone in the European currency is forcing EUR/JPY to leave the area of recent tops beyond 124.00 the figure and slips back to the 123.70 region at the time of writing.

EUR/JPY hurt by bout of risk-off

After climbing to news monthly peaks above the 124.00 mark on Wednesday and earlier on Thursday, a bout of dollar’s strength hurt the sentiment in the riskier assets and prompted EUR/JPY to correct lower. The move, however, could be considered as short-lived and also technical, as the underlying bullish bias remains unchanged although the cross is navigating the overbought territory. In the US, Initial Claims rose more than expected by 1,416 million during last week, while Continuing Claims ticked lower to around 16.2 million. Later in the session, the European Commission will release it preliminary gauge of the Consumer Confidence for the current month.

EUR/JPY relevant levels

At the moment the cross is losing 0.12% at 123.83 and a drop below 121.14 (monthly high Mar.25) would expose 119.90 (200-day SMA) and then 119.31 (monthly low Jun.22). On the flip side, the next up barrier is located at 124.43 (2020 high Jun.5) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1).