- EUR / JPY bullish momentum lost momentum at the 125.00 zone.
- Rumors of increased US stimulus hurt the dollar.
- The markets’ attention remains on the advance of the COVID-19 pandemic.
The renewed demand for the safe haven yen forces the EUR/JPY to leave the area of recent highs at 125.00 on Wednesday.
EUR / JPY finds resistance around 125.00
EUR / JPY reverses a 3-day positive streak despite persistent improvement in sentiment surrounding the risk space.
In fact, market buzz about a possible additional US stimulus package is keeping the dollar under heavy pressure for another session, particularly after the latest news citing both US Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi could resume talks as soon as later in the evening.
Nothing programmed wise data in Euroland, while the ECB’s Luis De Guindos said earlier in the session that an early removal of the current stimulus has the potential to damage the incipient recovery in the region while warning against financial risks stemming from the rising debt. Later in the session, another speech from De Guindos is expected along with a speech from board member Phillip Lane.
On the US calendar, all attention is expected to turn to the publication of the Fed’s Beige Book later in the session.
Technical levels
Right now, the cross is shedding 0.29% at 124.33 and a drop below 123.50 (100-day SMA) would target 123.01 (October 15 monthly low) and finally 122.37 (September 28 monthly low). On the other hand, the next barrier is located at 125.08 (monthly maximum on October 9) followed by 126.46 (weekly maximum on September 10) and then 127.07 (2020 maximum on September 1).
Credits: Forex Street
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