EUR/JPY heavy, breaches 132.50 on firmer DXY, Spanish vote

The selling pressure behind the Euro intensifies, knocking-off the EUR/JPY cross below the mid-point of 132 handle, as the bears now target the next support located near 132.30 region.

EUR/JPY: Losing sight of 133 handle?

The cross in EUR/JPY stalled its recovery momentum just ahead of 133 handle, and from there took a sharp U-turn, in the wake of broad EUR sell-off, triggered by the outcome of the Catalan ‘Yes’ vote and the resultant uncertainty surrounding the Spanish political climate.

Moreover, the ongoing US dollar rally against its main competitors amid rising Fed rate hike expectations, also continues to weigh down on the EUR/USD pair, in turn adding to the weight in EUR/JPY.

Also, the retreat in the USD/JPY pair, after having failed above 113 handle, added to the fresh bout of selling seen in the cross. Meanwhile, markets ignored upbeat Euro area manufacturing PMI reports, as an uptick in the Eurozone jobless rate dented the sentiment around the Euro.

Later today, the pair awaits the US ISM manufacturing PMI report and Fedspeak for fresh momentum.

EUR/JPY Technical Set-up    

 A break above 133.04/07 [10-DMA/ daily top] would open doors for 133.25 [Sep 20 high], above which a major hurdle is seen directly at 134.41 [Sep 22 high]. On the downside, breach of support at 132.32/29 [Sept 29 & 28 low] would expose 132.00 [round number] and 131.75 [Sept 26 low].