EUR/JPY off daily highs, turns negative near 119.50

EUR/JPY returns to the mid-119.00s after testing 119.80.
EMU final CPI figures fell in line with preliminary prints.
FOMC meeting will be the salient event later today.

Pablo Piovano FXStreet

The now offered bias around the European currency is forcing EUR/JPY to give away initial gains and return to the 119.50/40 band.

EUR/JPY focused on FOMC event

The cross continues to face headwinds in the area just below 120.00 the figure, where sits the key multi-month resistance line (off April’s high).

So far, the now increasing selling pressure around the single currency is driving the cross lower although it manages well to keep business above the 119.00 mark for the time being.

EUR appears somewhat hurt by the better mood surrounding the buck, while final inflation figures in the euro area failed to surprised to the upside today, showing consumer princes rose 0.1% MoM and 1.0% YoY, matching the preliminary readings.

Looking ahead, the critical FOMC event will drive the sentiment in the global markets. Despite another 25 bps ‘insurance cut’ is already priced in, there is not such a thing regarding the potential tone from Chief Powell at his press conference, leaving the door open to a probable disappointment for USD-bears.

EUR/JPY relevant levels

At the moment the cross is retreating 0.19% at 119.46 and a breach of 118.08 (21-day SMA) would expose 115.86 (2019 low Sep.3) and finally 114.85 (2017 low Apr.17). On the upside, the next up barrier aligns at 120.01 (monthly high Sep.13) seconded by 120.74 (100-day SMA) and then 121.37 (high Jul.25).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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