The shared currency continued to be sold against other major currencies, resulting in a decline of the EURJPY cross to the main support level again.
Earlier in the day, German retail sales came out below expectations, dropping to -2.9% year-on-year in October, down from -0.6% previously. The monthly change improved to -0.3% (but stayed negative) from -1.9% in September.
The euro dropped to the critical support zone of 128, where previous lows were. Also, so fat it looks like a multiple bottom pattern. However, larger stop-losses could be hit if the euro drops below it, potentially sending the single currency toward the 127 zone.
Alternatively, the upside seems to be capped at 128.60, and the euro must climb above that zone to cancel the immediate bearish threat. In that scenario, we could see a relief rally toward the psychological 130 threshold.
The cross looks oversold on many timeframes, possibly helping the euro to stage a minor comeback.
Later in the day, the Fed’s Powell holds another day of testimony, likely causing volatility in the FX market.