EUR/JPY fades spike to 118.15 on reports of US missile launch on Syria

The bid tone around the Japanese Yen strengthened, pushing the EUR/JPY down to square one at 117.50 after reports hit the wires that US launched missile attacks on Syria. 

The Euro side of the story remains weak, courtesy of Draghi squashing rate rise talk on Thursday. 

“Before making any alterations to the components of our stance - interest rates, asset purchases and forward guidance - we still need to build sufficient confidence that inflation will indeed converge to our aim over a medium-term horizon, and will remain there even in less supportive monetary policy conditions,” Draghi said. 

The uptick seen in early Asia was largely due to USD/JPY pair having another go at the key psychological resistance of 111.00. However, the geopolitical uncertainty pushed the USD/JPY pair to a fresh session low of 110.39. Meanwhile, EUR/USD remains flat lined around 1.0640. 

German industrial production and trade balance numbers due for release later today may not have a major impact on the pair as the focus is on Trump-Xi meeting and US wage growth numbers. 

The geopolitical uncertainty could keep the Japanese Yen well bid ahead of the weekend. 

EUR/JPY Technical Levels

The cross was last seen trading around 117.65 levels. A breakdown of support at 117.36 (previous session’s low) would open up downside towards 116.25 (Nov 17 low) and 116.00 levels. On the higher side, breach of hurdle at 118.01 (5-DMA) could yield a re-test of 118.23 (Feb 24 low) and 118.59 (Feb 22 low).