EUR/JPY ends five-day negative streak and rises back above 120.00
|- Euro erases most of weekly losses against Japanese yen, rising almost 80 pips from yesterday’s low.
- Yen among worst performers amid rising equity prices and a stabilization in US yields.
The EUR/JPY pair is rising sharply on Friday, following five consecutive days of losses. An improvement in risk sentiment helped the pair moved off monthly lows and regained 120.00.
Euro finds support as Yen weakens
Wall Street indexes are higher today, trading at daily highs at moment with gains around 0.40%. At the same time US yields remain steady, following days of sharp declines. Those moves weakened the demand for the Japanese yen that is among the worst performers.
The euro found support today and the rebound of the EUR/USD back above 1.1050 added more momentum to EUR/JPY. The pair is having the best performance in more than a month and in a few hours trimmed most of this week losses.
Technical outlook
Yesterday EUR/JPY bottomed at 119.22, the lowest level in a months. Since then it has risen almost a hundred pips. It is trading at 120.15, testing the 20-day moving average and also Wednesday’s high. If the pair consolidates at current or higher level it could signal that a short-term bottom is in place. Above 120.15/20 the next resistance level might be seen at 120.35 followed by 120.55.
On the flip side, if the pair fails to break above 120.15 in the coming session, a correction seems likely. The critical immediate support might be seen at 119.80; a break lower would clear a slide to the next support at 119.55 (Nov 13 low).
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