EUR/JPY flirting with session lows near 122.20

• EUR/JPY picks up downside pace and approaches 122.00.
• Strong demand for the Japanese safe haven weighs on the cross.
• ECB’s gauges surprised to the upside in April.

Increasing buying interest around the Japanese safe haven is now forcing EUR/JPY to refocus on the downside and prints new daily lows in the 122.20 area.

EUR/JPY weaker on JPY-buying

The leg lower in the cross is gathering extra steam today on the back of rising demand for the Japanese currency, in turn supported by declining US yields in the 10-year reference.

In the meantime, the cross is retreating for the fourth consecutive week so far, navigating within a multi-session sideline theme in levels last seen in early January near the critical support at 122.00 the figure.

As usual, US-China trade effervescence continues to dictate the direction in the broad risk appetite trends and has resurfaced as of late on the back of Trump’s suggestion that extra tariffs are in the pipeline.

Data wise in Euroland, ECB’s M3 Money Supply expanded 4.7% on a year to April and Private Sector Loans rose 3.4% over the last twelve months, both prints coming in above expectations.

Additional data in the region saw Consumer Confidence at -6.5 in May and Business Climate at 0.40 for the same period.

EUR/JPY relevant levels

At the moment the cross is retreating 0.26% at 122.26 and a breach of 122.08 (low May 15) would aim for 120.54 (monthly low Jan.17 2017) and then 118.82 (2019 low Jan.3 ‘flash crash’). On the upside, the next resistance emerges at 123.27 (21-day SMA) followed by 123.75 (high May 21) and finally 124.29 (high May 6).