EUR/JPY Rejected at 5-DMA, Drops Sharply Towards 123
The EUR/JPY
cross is seen in the red ahead of the European open, with the weakness
mainly attributed to broad yen strength in response to the G7 Summit
held over the weekend.
EUR/JPY: heading towards daily lows
The EUR/JPY pair now drops -0.29% to 123.27, unable to sustain the
recovery from 123.15, session lows. The cross in the EUR/JPY keeps the
offered tone intact and slips back towards 123 handle as the prices meet
strong resistance at 5-DMA (123.45) amid persistent broad based US
dollar weakness.
Moreover, the yen’s relative strength after the G7 leaders issued strong
warning to the Japanese authorities against fx intervention, continues
to weigh on the EUR/JPY cross. The week ahead holds a number of
significant economic events, including the US GDP figures, Japanese CPI
data and Fed Chair Yellen’s speech, which will provide fresh impetus on
both the EUR and JPY.
EUR/JPY Levels to consider
The pair has an immediate resistance at 124/124.18 (round number/ May 17
High) and from there to 124.50 (psychological levels). On the flip
side, support is seen at 123/122.96 (round number/ May 18 low/) below
which it could extend losses to towards 121.88 (May 9 Low).
