EUR/JPY clinches 2020 highs and approaches 126.00

EUR/JPY advances further and record fresh yearly highs near 125.90
JPY weakness and better mood in the riskier assets lift the cross.
US July’s CPI next of relevance in the calendar.

Pablo Piovano FXStreet

The increasing offered bias in the Japanese yen lifts EUR/JPY to the area of fresh tops around 125.90 on Wednesday.

EUR/JPY now targets 127.50

EUR/JPY has accelerated the rebound from weekly lows near 124.30 amidst the continuation of the selling pressure hitting the Japanese safe haven, all in response to the moderate recovery in yields of the US 10-year reference and the broad-based positive note in the risk complex.

In addition, the dollar’s recovery appears to be running out of steam, morphing into extra legs to the single currency and also another driver behind the bounce in the cross to levels last seen in April 2019.

In the calendar, Industrial Production in the broader Euroland expanded 9.1% MoM in June and contracted 12.3% from a year earlier.

Later in the NA session, inflation figures measured by the CPI are due for the month of July ahead of the EIA’s report on crude stockpiles and speeches by FOMC’s Rosengren, Kaplan and Daly.

EUR/JPY relevant levels

At the moment the cross is gaining 0.62% at 125.78 and faces the next up barrier at 125.86 (2020 high Aug.12) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1). On the flip side, a drop below 122.87 (monthly high Jan.16) would expose 121.14 (monthly high Mar.25) and then 120.16 (200-day SMA).

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Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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