EUR/JPY drops to 118.70, lowest since January 2013

The increasing selling pressure around the single currency is now sending EUR/JPY to test fresh lows in the 118.80 area.

EUR/JPY weaker on Bunds, risk aversion

The common currency met further downside pressure in response to declining yields in German Bunds, with the 10-year benchmark testing the 0% level.

The dominating risk aversion context continues to favours the Japanese safe haven, prompting market participants to ignore auspicious results from EMU’s Industrial Production during April and Employment Change in Q1.

EUR/JPY relevant levels

At the moment the cross is losing 1.18% at 118.71 and a breach of 116.42 (low Jan.16 2013) would expose 113.54 (low Jan.9 2013) and finally 105.93 (monthly low Dec.10 2012). On the other hand, the next up barrier lines up at 120.32 (high Jun.13) ahead of 121.81 (20-day sma) and then 122.74 (low Jun.7).