EUR/JPY remains depressed near 123.50 on JPY-buying

• EUR/JPY stays on the defensive around the 123.50 region.
• JPY-strength prevails and drags the cross lower on Monday.
• Dollar’s sell-off gives extra legs to the demand for the Japanese yen.

EUR/JPY has started the week on the negative footing around the 123.50 region amidst the continuation of the buying pressure around the Japanese currency.

EUR/JPY weaker on stronger yen

EUR/JPY is losing ground for the third consecutive session at the beginning of the week despite the rally in the European currency is giving no signs of respite, at least in the very near-term.

In fact, the wave of selling pressure continues to hurt the greenback and therefore adds to the yen demand, limiting the upside momentum in the cross.

In the meantime, the generalized risk appetite trends keep benefiting the riskier assets, while investors appear to lean to the Japanese yen and the Swiss franc when comes to pick up a safe haven, all in detriment of the buck.

In the docket, the German Business Climate tracked by the IFO survey surprised to the upside in July. Additional data saw the ECB’s Private Sector Loans expanding at an annualized 3.0% and M3 Money Supply expanded 9.2% on a year to June.

EUR/JPY relevant levels

At the moment the cross is losing 0.14% at 123.50 and a drop below 122.87 (monthly high Jan.16) would expose 121.14 (monthly high Mar.25) and then 119.93 (200-day SMA). On the flip side, the next up barrier is located at 124.43 (2020 high Jun.5) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1).