EUR/JPY Drops Below Weekly High of 138.00 as Japan Returns from Vacation

EUR/JPY strengthens bids to retest intraday highs near 137.60, edging closer to a weekly high during Friday's lively Asian session.

The cross-currency pair's recent advances could be attributed to rising US Treasury rates, which typically act as a drag on JPY pricing. Additionally, the difference in monetary policy between the European Central Bank (ECB) and the Bank of Japan is likely to have helped EUR/JPY purchasers (BOJ).

It's worth mentioning that recent EUR/JPY gains have overlooked robust Tokyo Consumer Price Index (CPI) data for April, which showed a 2.5 percent YoY increase versus the projected 1.9 percent and 1.3 percent previously. Additionally, the disappointment from German Factory Orders was thought to have weighed on the pair's upside, but did not. The European powerhouse's main industrial activity data fell by the most in five months the previous day, to -4.7 percent, compared to -1.1 percent projected and a corrected preceding release of -0.8 percent.

The S&P 500 Futures contract fell 0.33 percent, while US 10-year Treasury yields increased five basis points (bps) to 3.07 percent at the latest.

Moving forward, a light calendar in Europe and Japan may not disappoint EUR/JPY momentum traders, as the US employment report and risk catalysts are generating significant market movement.

Analyses Techniques

EUR/JPY continues oriented towards a late April swing bottom between 138.25-30 unless it breaks below the 21-DMA level near 137.00.

Significant Additional Levels