EUR/JPY recedes from tops near 130.50, US ADP disappoints

• EUR/JPY loses momentum near the 130.50 level.
• US ADP report came in well below estimates in August.
• Markets’ focus now shifts to the upcoming ISM Manufacturing.

EUR/JPY now gives away part of the earlier advance to fresh tops in the mid-130.00s and retreats to the 130.20 region.

EUR/JPY hurt by poor US data

EUR/JPY saw its upside trimmed after the US ADP report surprised to the upside, coming in at 374K for the month of August vs. an expected gain of more than 600K jobs.

The poor print from the ADP motivated a knee-jerk in yields of the US 10-year benchmark to levels below the key 1.30% mark, igniting at the same time a fresh selling pressure in the dollar vs. its main peers.

Earlier in the calendar, Japan’s Capital Spending expanded 5.2% YoY in the second quarter, while the manufacturing PMI eased a tad to 527.7 in August. Closer to home, the manufacturing PMI receded a tad from the preliminary readings in both Germany and the euro area. In addition, German Retail Sales contracted 5.1% MoM and 0.3% YoY on a year to July.

Later in the session, the US ISM Manufacturing is expected to ease to 58.6 (from 59.5) during last month.

EUR/JPY relevant levels

So far, the cross is gaining 0.21% at 130.17 and a surpass of 130.44 (weekly high Sep.1) would expose 130.67 (Fibo level) and then 131.07 (100-day SMA). On the downside, the next support comes in at 129.28 (200-day SMA) seconded by 127.93 (monthly low Aug.19) and finally 127.00 (round level).