• EUR/JPY loses further momentum and drops to 4-week lows.
• The cross meets support around the key 200-day SMA.
• The rebound in the greenback pushed DXY above 95.00.

The intense upside momentum in the greenback puts the risk complex under further pressure and forces EUR/JPY to extend the losses to the 130.40 region.

EUR/JPY focuses on the 200-day SMA near 130.40

EUR/JPY drops and navigates the area of multi-week lows in the 130.50/40 band on Thursday, all against the backdrop of the persistent move higher in the dollar.

Indeed, and with the US bonds markets closed, the Japanese yen maintains a steady performance so far in the session, while the unabated offered stance in the single currency – and the rest of the risk galaxy – drags the cross lower.

So far, the critical 200-day SMA appears to be holding the downside for the time being, while a breach of this area on a sustainable fashion might prompt investors to shift the outlook to negative in the short-term horizon.

Nothing of note data wise on both sides of the ocean, although the European Commission (EC) updated its Macroeconomic Projections and now sees the euro area expanding 5% this year and 4.3% in 2022; when it comes to inflation, prices are seen rising 2.4% this year and 2.2% in the next one.

EUR/JPY relevant levels

So far, the cross is losing 0.14% at 130.54 and a surpass of 131.51 (38.2% Fibo of the October upside) would expose 131.95 (20-day SMA) and then 132.56 (monthly high Nov.4). On the downside, the next support comes at 130.43 (200-day SMA) followed by 130.25 (100-day SMA) and finally 129.43 (78.6% Fibo of the October upside).