- EUR/JPY has been able to drift higher where attention is on US benchmarks and record highs as well as Brexit developments.
- The S&P 500 index has surpassed its previous intraday all-time high.
EUR/JPY has firmed through the 200-hour moving average in recent trade, extending the bid from the 25th October upside correction as EUR/USD picks up a bid, albeit USD/JPY can hold up the advance as its ducks back below the 109 handle.
EUR/JPY has been able to drift on the bid as European and US benchmarks continue to perform on an otherwise relatively quiet start to the week where third-quarter earnings, with 162 S&P 500 companies due to release quarterly financial results this week, and Brexit developments are taking the spotlight. The S&P 500 index has surpassed its previous intraday all-time high which gives weight to the upside potential in EUR/JPY.
As far as Brexit developments come, details of UK Prime Minister Johnson's letter to EU's Tusk arrived a little earlier today, whereby the Prime Minister has officially confirmed the extension yet expresses his concerns that the unwanted extension is damaging to the UK's democracy and to its relationship with the EU. Meanwhile, Boris Johnson has begun the parliamentary debate over whether to hold a general election on December 12 and we will have results of the vote coming up, a potential catalyst for the price action in EUR/JPY.
Looking ahead, key data and events
Meanwhile and looking ahead, besides Brexit politics and central banks, this week brings a handful of data releases, including US and euro area Q3 GDP, euro area inflation, as well as various ISM/PMIs, and, not least, US non-farm payrolls are sure to shake things up for the cross.
EUR/JPY levels
Analysts at Commerzbank have explained that EUR/JPY last week tested and held below the 121.34/ 50% Fibonacci retracement:
"This is also the top of a near term channel and the 121.38late July high - the break has been minor and we look for it to continue hold the topside (viewed as a false break). Dips lower will find support at the 55-day ma at 119.38/118.60, ahead of the 117.85 uptrends.Above here lies the 200-day ma at 122.18 and the 123.34 July high."
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