EUR/JPY corrects lower, meets resistance near 133.50
21.10.2021, 13:45

EUR/JPY corrects lower, meets resistance near 133.50

  • The upside momentum in EUR/JPY faltered near 133.50.
  • The yen regains traction as US yields grind lower.
  • US Initial Claims rose by 290K, Philly Fed Index disappoints.

The recovery in the Japanese yen motivates the sharp rally in EUR/JPY to enter a pause mode after hitting fresh tops in the mid-133.00s on Wednesday.

EUR/JPY off 4-month peaks

Despite the ongoing corrective pullback, EUR/JPY manages to cling to the positive territory for the third week in a row and sheds ground for the first time after ten consecutive daily advances. In addition, the cross has almost fully retraced the January-August drop.

In fact, yields of the key US 10-year benchmark note and the long end of the curve recede from recent tops, prompting the Japanese yen to regain some ground lost vs. its American counterpart. Yields in the front end of the curve, in the meantime, reverse two daily decline and retake the 0.40% level.

In the docket, US weekly Claims rose by 290K in the week to October 16, while the Philly Fed Index came in short of expectations at 23.8 for the current month. Later, Existing Home Sales and the CB Leading Index will close the daily calendar.

EUR/JPY relevant levels

So far, the cross is losing 0.51% at 132.44 and a surpass of 133.48 (monthly high Oct.20) would expose 133.76 (high Jun.10) and then 134.12 (2021 high Jun.1). On the downside, the next support comes at 131.85 (10-day SMA) followed by 131.02 (Fibo level) and finally 130.38 (100-day SMA).

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