The EUR/JPY pair extended its losses for a second. – Crypto News – Crypto News
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The EUR/JPY pair extended its losses for a second. – Crypto News

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  • EUR/JPY tallied a second consecutive day of losses, dropping towards 157.40.
  • Germany’s CPI rose to 6.4% vs 6.3% expected and Spanish CPI to 1.9% vs 1.7% expected.
  • Japanese retail sales rose more than expected in May.

The EUR/JPY pair extended its losses for a second consecutive day, sliding towards 157.40. Strong Retail Sales data from Japan contributed to the Japanese Yen gaining ground. Despite hot inflation figures reported in Germany, with CPI rising to 6.4% (versus 6.3% expected), and in Spain, with CPI reaching 1.9% (versus 1.7% expected), the EUR/JPY pair remained under pressure, but rising German yields limited the Euro’s downside potential.

Japan reported strong data, all eyes on inflation figures on Friday

Retail sales in Japan showed positive results in May, with a notable increase of 1.3% compared to expectations of 0.8%. This positive momentum follows a revised figure of 1.1% in April, previously reported as a decline of -1.2%. Year-on-year, Retail Sales surged by 5.7%, surpassing expectations of 5.2% and reflecting an upward revision from the revised 5.1% in April.

It’s worth noting that Kazuo Ueda, Bank of Japan’s (BoJ) Governor, retained a cautious stance during his speech at the European Central Bank’s Sintra Forum on Wednesday, highlighting that the underlying inflation remains below the target set by the BoJ. He further expressed his intention to evaluate policy adjustments only when inflationary pressures align with the central bank’s forecasts. as strong economic data may contribute to a rise in inflationary pressures, the Tokyo Consumer Price Index (CPI) from June and May’s Unemployment rate, both out on Friday, will be closely watched by investors.

On the Euro’s side, German bond yields increased following the hot inflation figures from Germany and Spain. The 2- and 5-year yields rose by 2.48% and 4.75% to 3.26% and 2.60%, limiting the European currency’s losses.

EUR/JPY Levels to watch

According to the daily chart analyze, the EUR/JPY pair maintains a positive outlook, although the bullish momentum has temporarily paused. Despite two consecutive days of losses, the Relative Strength Index (RSI) remains in overbought territory since mid-June so there may be still more room for downside movements.

On the downside, support levels line up at 157.00, 156.50, and 156.00. On the flip side, if bulls regain momentum, there are resistance levels to monitor at 158.00, 158.50, and 159.00.

EUR/JPY Daily chart

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