EUR/JPY bears lapping up the German ZEW miss
- EUR/JPY downside remains compelling in the 118 handle.
- Coronavirus failing to support the yen, although euro is weaker as data fails to impress.
EUR/JPY is currently trading at 118.67 between a range of 118.55 and 118.68, as bulls step away from the bearish rend which recently broke below a critical support structure. EUR/USD has been relentless on the downside and there have been no bids and a wobble overnight indexes in Europan and the US gave a lift to the yen, pressuring the cross further.
EUR/USD has lost ground due to a grim economic outlook and unsupportive data with mounting speculation around the negative impact of the coronavirus. The German ZEW index for February offered a first glimpse of the impact on coronavirus on European surveys.
"Both the Expectations Index and the Current Situation Index dropped sharply (by around 20 points and 6 points, respectively). It should come as no surprise that the declines were acute in the Automobile and Electronics sectors, but most other sectors were relatively flat in the month. The Expectations Index, despite its near 20-point decline, still lies above move of its 2018-2019 range," analysts at TD Securities explained. The result will likely continue to weigh in euro crosses.
Yen unable to find traction despite coronavirus risks
As for the yen it was still failing to rally on the coronavirus story at the start of this week and remains pressured vs the greenback around the 110 handle. We would likely need to witness a decisive turn for the worse in the virus newsflow, but that doesn't;t seem to be panning out for the yen bulls. More on that here: Coronavirus peaking? How will it impact the global economies and FX?
EUR/JPY levels