EUR/JPY breaks eight-day losing streak, hovers around 130.00 level

• EUR/JPY keeps investors on edge ahead of Eurozone GDP data, ECB Lagarde's speech.
• The cross-currency pair draws concern from each side of their territory.

EUR/JPY has moved past its eight-day negative session streak on Tuesday and is trading around 130.00 level. 

So far, the pair has been reeling under pressure from the rising US dollar, supported by the inflation figures. In addition to this, the corrective downside in the US treasury yields also contributed to the negative trend in the pair.

On Tuesday, the US dollar is flexing its muscles as it continues to hover around a 16-month high at 95.40. On the other hand, the US Treasury yields retreated amid mixed market sentiment, ahead of US Retail Sales data, scheduled for release later in the day.

The retreat in the Treasury yields is also a result of positive reports emerging from the talks between US president Joe Biden and his Chinese counterpart Xi Jinping. The two leaders held virtual discussions about human rights and security issues.

Other than the US Retail Sales data, the market participants' sentiments will also be affected by the Eurozone's upcoming Gross Domestic Product data release and European Central Bank (ECB) President Christine Lagarde's speech.

In Eurozone news, geopolitical tensions remain high in Europe due to the Belarus border crisis, which deepens along its border with Poland. ECB officials also continue to see inflationary pressures as transitory. Also, the Netherlands started a three-week lockdown at the weekend, Austria is imposing a lockdown on the unvaccinated and infection rates in Germany are at a record high. These all have somehow impacted the euro, causing the pair to perform relatively subdued of late.

Earlier data suggests that Industrial Production in the broader Euroland contracted 0.2% MoM in September and 5.2% over the last twelve months. Japan reported weak Q3 GDP data and Bank of Japan (BOJ) Governor Kuroda hinted that its covid funding program might be scaled back. 

In the interim, the greenback continued appreciation. The reason could be a hint of Fed tapering as per the November 2-3 FOMC meeting. It has undermined the safe-haven appeal of JPY. The price action for the pair could get tailwinds from US President Joe Biden's $1.0 trillion, bi-partisan infrastructure bill.

EUR/JPY technical levels