EUR/JPY looks offered, meets resistance around 129.00

• EUR/JPY fades part of Monday’s decent advance.
• German final Q2 GDP surprised to the upside.
• New Home Sales, Richmond Fed Index come up next.

The generalized consolidative mood in the global markets prompts EUR/JPY to trade within a narrow range below the 129.00 yardstick on turnaround Tuesday.

EUR/JPY focused on risk trends, Jackson Hole

EUR/JPY has been rejected from recent tops in the 129.00 neighbourhood, area coincident with the key 200-day SMA, following the moderate bounce off last week’s lows in levels just below 128.00 the figure.

The ongoing side-line mood in the global markets follows the rising cautiousness ahead of the Jackson Hole Symposium on August 26-28, and particularly Chief Powell’s speech on Friday.

Indeed, Powell’s speech will be closely watched for details on any hint at the timing of the QE tapering by the Federal Reserve as well as a potential move on the Fed Funds earlier than anticipated.

In the meantime, yields of the key US 10-year note remain in a consolidative pattern below the 1.30% level so far.

Earlier in the calendar, the German economy expanded 1.6% QoQ in Q2 and 9.4% vs. the same period in 2020. Later in the session, New Home Sales are due seconded by the Richmond Fed Index.

EUR/JPY relevant levels

So far, the cross is losing 0.05% at 128.76 and faces the next support at 127.93 (monthly low Aug.19) followed by 127.02 (78.6% Fibo of the March-June rally) and finally 126.00 (round level). On the upside, a surpass of 129.09 (200-day SMA) would expose 130.01 (high Aug.5) and then 130.56 (weekly high Jul.29).