EUR/JPY extends six-day winning streak with eyes on trade headlines, ECB’s Coeure
|- EUR/JPY nears six-week high by the press time of early Tuesday.
- Comments from ECB’s Lagarde, upbeat activity numbers and downbeat USD favor the pair’s rise.
- ECB’s Coeure and trade/political catalysts will be in focus amid a lack of major data.
EUR/JPY rises to 120.90 while heading into the European open on Tuesday. The quote is on its seventh day of winning streak as the regional currency recently benefited from the European Central Bank (ECB) President Christine Lagarde’s upbeat comments.
The pair recently got a boost from the Japanese Prime Minister’s (PM) comments that Japan is in the final stages of preparing an economic stimulus package. It’s worth mentioning that expectations of further global monetary easing help Asian stocks to recover earlier losses whereas looming uncertainty surrounding the global trade mechanism keeps the US 10-year treasury yields under pressure around 1.84% by the press time. Further, news that North Korea gave Christmas as a deadline to the US adds weight to the risk tone.
The ECB President Lagarde’s testimony on Monday failed to provide any clear clues to markets while keeping downside risks on the card. However, recovery in the regional and German activity numbers, coupled with the broad weakness of the US dollar (USD), favored the pair’s buyers. Even so, the upside was in check as the United States (US) marched on its trade protectionism while announcing trade negatives headlines concerning South America, the European Union (EU) and China.
Markets are now gearing up for the speech of the ECB board member Benoît Coeuré for seeking clarifications over President Lagarde’s earlier comments. Also, catalysts affecting the global trade/political environment will also be on investors’ radar.
Technical Analysis
As long as prices stay beyond 50-day Simple Moving Average (SMA) level of 119.80, buyers can keep targeting 120.50/60 region including October tops and 200-day SMA.
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