EUR/JPY extends daily gains to new ten-day high

The EUR/JPY pair caught a fresh bid-wave during the early trading hours of the American session and reached a new ten-day top at 117.75. After easing back a little, the pair is trading at 117.73, up 1% on the day.

The pair was able to record gains in every single day since the start of the week and Thursday is no exception. The pair's upsurge is mainly fueled by the shared currency's strength as the Euro Index is up 0.5% on the day, at 87.10.

Furthermore, the yen encountered more selling pressure after a recent announcement by Japan's Mitsui Life Insurance Co revealed that the company is plannig to shift some funds to euro-denominated bonds from dollar bonds in the financial year to March, as currency hedging costs for the dollar are expected to rise. The company also expects the dollar to rise to 111-121 yen by March 2018. Additionally, the USD/JPY pair continues to trade near daily highs around mid-109's despite a weak greenback, suggesting that the JPY weakness is the main driver of the price action.

Technical outlook

The immediate resistance for the pair is seen at 118.00/05 (psychological level/Apr. 10 high) ahead of 118.80 (Apr. 5 high) and 119.05 (Apr. 3 high). On the flip side, supports align at 117 (psychological level), 116.60 (daily low) and 115.75 (Apr. 18 low).

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