EUR/JPY extends the drop below 122.00 ahead of data
- EUR/JPY moves further south and approaches 121.00.
- Alternating risk appetite trends continue to drive the sentiment.
- US weekly Initial Claims will be in the limelight later on Thursday.
EUR/JPY is prolonging the leg lower following Wednesday’s breakdown of the key support at 122.00 the figure.
EUR/JPY focused on risk trends, data
EUR/JPY is down for the fifth consecutive session on Thursday, prolonging the rejection from new 2020 peaks beyond 124.00 the figure recorded last Friday.
The cross remains under pressure amidst alternating risk appetite trends, while the progress of the re-opening of economies around the world (despite the pandemic stays far from abated) continues to be the main driver for the price action.
On Wednesday, the Federal Reserve left unchanged its monetary policy conditions (interest rates and bonds-purchase programme), although hinted at the probability that the recovery from the impact of the coronavirus could take longer than initially predicted.
Later in the NA session, market participants are expected to closely follow another release of the week Claims followed by Producer Prices for the month of May. Closer to home, another virtual meeting is due by the EuroGroup.
EUR/JPY relevant levels
At the moment the cross is losing 0.17% at 121.61 and a drop below 121.14 (monthly high Mar.25) would expose 119.47 (200-day SMA) and then 118.71 (100-day SMA). On the upside, the next barrier lines up at 124.43 (2020 high Jun.5) followed by 125.23 (monthly high May 1 2019) and finally 126.79 (monthly high Apr.19 2019).