EUR/JPY upside capped by the 200-hour SMA below 121.00

• EUR/JPY trades within a tight range, still in sub -121.00 levels.
• EUR weakness keeps limiting the upside potential in the cross.
• BoJ meeting (Tuesday), FOMC event (Wednesday) in the limelight.

EUR/JPY is navigating a tight 20-pip range at the beginning of the week, always below the 121.00 handle and with gains capped near the 200-hour SMA in the 120.90 region.

EUR/JPY looks to central banks, data

After clinching weekly tops near 121.40 in the wake of the ECB meeting last Thursday, the cross came under selling pressure although the decline faltered near 120.70, or daily lows.

The selling mood around the Japanese currency keeps limiting the downside vs. a steady/bearish view in EUR, as market participants remain reluctant to take positions in the shared currency in light of the almost certain announcement of accommodative measures by the ECB in the next weeks.

Moving forward, the BoJ meeting is unlikely to be a market mover tomorrow, while all the attention will be on the FOMC event on Wednesday as well as on the publication of the advanced CPI and Q2 GDP figures in Euroland.

EUR/JPY relevant levels

At the moment the cross is receding 0.08% at 120.82 and a breakdown of 120.75 (low Jul.29) would aim for 120.05 (low Jul.25) and then 118.82 (2019 low Jan.3). On the upside, the initial hurdle aligns at 121.37 (high Jul.25) followed by 121.40 (21-day SMA) and finally 122.32 (high Jul.10).