EUR/JPY extends the rally further north of 126.00

The cross picks up extra pace and navigates highs near 126.50.
Japanese Yen weakness supports the upside.
The cross now targets YTD highs beyond 127.00.

Pablo Piovano FXStreet

The prevailing selling bias around the Japanese safe haven continues to give extra oxygen to the upside momentum in EUR/JPY, which is testing the mid-126.00s, or weekly highs.

EUR/JPY looks to risk trends, data

The up move in the cross appears unabated so far this week, advancing uninterruptedly since Monday and gaining further distance from monthly lows in the 124.30/25 band seen last week.

Positive mood around the riskier assets has been sustaining the sentiment in the cross, which has so far met resistance in the mid-126.00s, where emerges the 100-day SMA.

In addition, market participants appear to have bypassed some concerns over the US-China dispute after latest news hinted at the likeliness that President Trump and Xi Jinping could meet in mid-April.

In the data universe, earlier final inflation figures in Euroland matched the preliminary readings, while Italian final CPI came in below the advanced data. Still in Italy, Industrial New Orders and Industrial Sales expanded at a monthly 1.8% and 3.1%, respectively in January, reverting December’s contraction in both indicators.

EUR/JPY relevant levels

At the moment the cross is gaining 0.19% at 126.47 facing the next up barrier at 126.57 (high Mar.15) seconded by 127.50 (2019 high Mar.1) and finally 128.02 (200-day SMA). On the other hand, a breach of 125.83 (21-day SMA) would aim for 124.27 (low Mar.8) and then 123.39 (low Jan.15).

Author

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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