EUR/JPY turns positive above 118.00, moves to session highs
- EUR/JPY bounces off lows in the 117.70 region.
- Upbeat tone in EUR remains well and sound on USD-selling.
- US-China trade war remains in centre stage.
The sharp rebound in the demand for the single currency is sponsoring today’s rebound in EUR/JPY from earlier YTD lows in the 117.70 region to the current mid-118.00s, or daily highs.
EUR/JPY boosted by risk-off sentiment, trade uncertainty
Increasing jitter on the US-China trade, including the likelihood of Chinese retaliatory measures, continue to support the risk-off mood in the global markets, sparking a sharp correction lower in yields of the US 10-year note, which in turn morphed into fresh upside in JPY.
The selling bias in the greenback has been lending extra legs to the European currency, helping the cross to regain composure and rebound from new yearly lows in the 117.70 region seen during early trade.
In the calendar, final July Services PMIs in Germany and the broader euro area came in below expectations, while Investor Confidence in the bloc tracked by the Sentix Index tumbled further for the current month, also coming in short of estimates.
Later in the day, the US ISM Non-manufacturing will take centre stage in an otherwise empty docket.
EUR/JPY relevant levels
At the moment the cross is gaining 0.21% at 118.60 and faces the next hurdle at 120.19 (10-day SMA) seconded by 120.87 (21-day SMA) and then 121.37 (high Jul.25). On the downside, a breakdown of 117.67 (2019 low Aug.5) would open the door to 114.85 (2017 low Apr.17) and finally 113.71 (monthly low Nov.9 2016).