Further selling pressure in the European currency dragged EUR/JPY to fresh lows in the 129.40 region on Wednesday.
EUR/JPY resumes the downside and rapidly leaves behind Tuesday’s uptick. The continuation of the downtrend reached the 129.40 region before bouncing earlier in the session. In this area also coincides a Fibo level (of the October rally) and is considered the last defense before an assault to the October lows around 128.30.
The lack of direction in yields of the key US 10y note motivated the greenback to give away part of the earlier advance, while mixed results from the US housing sector also collaborated with the knee-jerk in the buck.
Earlier in the euro docket, the final October CPI in the euro area rose 4.1% YoY and 2.0% when it comes to the Core CPI. In Japan, the trade deficit shrank to ¥67.4B in October (from ¥624.1B) and Machinery Tools Orders expanded 12.5% in the year to September.
So far, the cross is losing 0.26% at 129.64 and a surpass of 130.18 (100-day SMA) would expose 130.49 (200-day SMA) and then 131.41 (high Nov.10). On the downside, the next support comes at 129.41 (78.6% Fibo of the October upside) followed by 128.33 (monthly low Oct.6) and finally 127.93 (monthly low Sep.22).
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