EUR/JPY flirting with daily highs near 119.20

EUR/JPY bounces off lows and regains the 119.00 level.
EMU Economic Sentiment reversed the drop in September.
Geopolitics, data expected to driver the sentiment ahead of FOMC.

Pablo Piovano FXStreet

EUR/JPY is reversing Monday’s pullback and it has now managed to retake the key barrier at 119.00 the figure and advance to daily highs around 119.20, coincident with the 55-day SMA.

EUR/JPY now focused on FOMC

Despite the ongoing rebound, the cross stays within negative territory so far this week, reversing two consecutive weekly closes with gains on the back improved risk-appetite and the consequent outflows from the safe haven JPY.

This week appears dominated by crude oil headlines in response to the attack to Saudi Arabia’s oil infrastructure last Saturday, all against the backdrop of sidelined global markets ahead of the key FOMC gathering on Wednesday.

It is worth recalling that consensus among market participants has already priced in a 25 bps rate cut, although recent strong results from US fundamentals play against extra dovishness from the Fed.

In the doclet earlier today, German and EMU Economic Sentiment bettered to -22.5 and -24.5, respectively for the current month, while Current Conditions in the German economy deteriorated further.

EUR/JPY relevant levels

At the moment the cross is advancing 0.29% at 119.29 and faces the next up barrier at 120.01 (monthly high Sep.13) seconded by 120.79 (100-day SMA) and then 121.37 (high Jul.25). On the other hand, a breach of 117.99 (21-day SMA) would expose 115.86 (2019 low Sep.3) and finally 114.85 (2017 low Apr.17).

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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