EUR/JPY: The ECB pushes the euro to hits 13-month highs near 124.00
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- EUR/JPY surges to 13-month highs at 123.90 after ECB’s announcement.
- The euro appreciates nearly 7% in a four-week rally.
- Above 123.36 next target would be 125.94 – Credit Suisse.
The euro accelerated its uptrend against the Japanese yen on Thursday after the European Central Bank announced its pledge to increase the coronavirus emergency fund. The pair has rallied nearly 150-pips after the announcement, reaching levels above 123.75 for the first time since early May 2019.
Euro rallies on ECB stimulus and market sentiment
The EUR/JPY has surged from levels below 122.00 on the US session opening to one-year highs at 123.90, buoyed by ECB’s announcement. The Bank has decided to step up its Pandemic Emergency Purchase Program (PEPP) to 1.35 trillion euros, an increase of 600 billion from the initial objective, beating the experts’ expectations of a 500 billion increment.
With this decision, the Bank confirms its commitment to support the worst COVID-19-hit countries and sectors, which has eased fears about an increase of the risk premium in peripheral countries and has been welcomed by the investors with generalized euro bets.
The euro is on track to complete a four-week rally against the Japanese yen. The pair has staged an impressive advance, appreciating nearly 7% with the safe-haven Japanese yen lost ground on the back of brighter market sentiment as major economies started to re-open following the coronavirus shutdown.
EUR/JPY: Above 123.36 next target would be 125.94 – Credit Suisse
If the pair confirms above 123.36 resistance area, the FX strategy team at Credit Suisse suggests an extension to the vicinity of 126.00, “Big picture, above 123.36 (and probably even 122.87 would be enough) would see a medium-term base established to mark a more significant turn higher, with resistance next at 125.94.”
EUR/JPY key levels to watch
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