EURJPY falls to crucial support

EURJPY falls to crucial support
The EURJPY cross dropped sharply on Monday as sentiment worsened, and it was about to test the 130 psychological level.

Friday’s US data showed that the CPI inflation rose again, jumping to the highest level ever during the euro time, printing 5% year-on-year, above the 4.7% expected. 

Nevertheless, the ECB remains oblivious, reiterating that it would not raise rates this year, still expecting inflation to ease soon. However, judging from the recent inflation momentum, that is not probable. 

Additionally, Friday’s data showed that retail sales in the eurozone improved notably from 0.3% to 1.0% monthly, with the yearly change soaring to 7.8% from 1.7% previously. 

The price is now testing previous highs near 130.50, where the 200-day moving average is also located. If that support is broken to the downside, the 130 barrier will be in play quickly. In case of a breakdown below 130, the euro will likely fall to the 50-day moving average (purple line) at 129.50.

On the other hand, the price must jump above the 200-day average (130.60) to stabilize in the short-term perspective. There is strong resistance at 131, where the bearish trend line from previous highs is seen.

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