EUR/JPY analysis: Yen plunges as demand for USD-related assets reignites

Valeria Bednarik FXStreet

EUR/JPY Current price: 122.70

The Japanese yen plunged against all of its major rivals, as the safe-haven currency was the most affected by late Wednesday FED's Yellen hawkish comments, who said that the Central Bank is willing to raise rates "a few times a year" until reaching what they consider a long-run neutral rate of 3% by 2019. Strong US data further hurt the JPY, boosting demand for USD-related assets. The US 10-year Treasury yield, jumped 10 basis points to 2.49%, closed to the highs reached last December at the epitome of Trump's confidence trade. The EUR/JPY pair jumped to a fresh weekly high above the 122.70 level, maintaining a strong upward momentum ahead of the Asian opening. In the 1 hour chart, technical indicators head north within overbought territory, whilst the price has surged strongly after approaching the 200 SMA, now trading well beyond it. In the 4 hours chart, the price has also recovered above its 100 and 200 SMAs, whilst technical indicators maintain their upward strength near overbought readings, supporting some further gains now, as long as the price holds above the 122.00 figure.

Support levels: 122.35 122.00 121.40

Resistance levels: 122.90 123.30 123.80

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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