EUR/JPY challenges weekly highs around 120.50

The better tone in the European currency is managing to offset the renewed demand for the Japanese yen, all lifting EUR/JPY to the vicinity of 120.60, near weekly highs.

EUR/JPY looks to COVID-19, data

The cross is advancing for the second consecutive session on Thursday, flirting at the same time with the critical 200-day SMA around 120.30. It is worth mentioning that above this key area, the downside pressure is expected to subside somewhat

Month-end flows, declining yields and re-ignited rumours of potential easing by the Fed in the next months are all weighing on the dollar and are sponsoring the continuation of the upbeat sentiment in the euro, while unremitting jitters on the Chinese coronavirus support the demand for the yen (and caps the daily upside).

In the euro docket, several gauges of sentiment/confidence in the broader Euroland came in on the positive side (in general), while the ECB’s M3 Money Supply expanded less than expected at an annualized 5.2% in January and Private Sector Loans expanded 3.7% from a year earlier.

Later in the NA session, another revision of the US GDP figures during the October-December period is due seconded by Durable Goods Orders, weekly Claims and additional housing data.

EUR/JPY relevant levels

At the moment the cross is gaining 0.23% at 120.42 and faces the next up barrier at 120.68 (100-day SMA) followed by 121.39 (weekly high Feb.20) and then 122.65 (monthly high Dec.13). On the downside, a drop below 119.41 (weekly low Feb.25) would expose 118.46 (2020 low Feb.18) and finally 117.07 (monthly low Oct.7 2019).