EUR/JPY struggles for direction above 125.00

• The cross keeps the trade near yesterday’s 2019 peaks.
• The European currency remains weak limiting the upside.
• EMU Retail Sales contracted more than expected in December.

After clinching fresh yearly highs just below the 126.00 milestone on Monday, EUR/JPY have come under some selling pressure and is now gyrating around 125.60.

EUR/JPY remains close to YTD tops

The cross is now alternating gains with losses following two consecutive daily advances, including quite a sustainable breakout of the critical resistance hurdle in the 125.00 neighbourhood and new YTD tops just ahead of 126.00 the figure.

The persistent selling bias around the Japanese safe haven appears to be taking a breather so far today despite US yields remain on the rise beyond the 2.73% mark. In combination with this, the shared currency is prolonging the leg lower, especially vs. the greenback.

In the data space, Services PMI in Euroland ticked higher to 51.2 in January, while Retail Sales in the region contracted at a monthly 1.6% in December, the largest drop since 2011.

EUR/JPY relevant levels

At the moment the cross is losing 0.05% at 125.60 and faces the next support at 125.00 (10-day SMA) followed by 124.70 (21-day SMA) and then 123.78 (low Jan.25). On the flip side, a surpass of 125.94 (high Feb.4) would expose 126.42 (55-day SMA) and finally 127.09 (high Dec.27 2018).