EUR/JPY flirts with monthly tops around 124.00

EUR/JPY stays firm and reclaims the 124.00 mark and above.
Upside momentum in the euro props up the daily advance.
ECB’s Lagarde, De Guindos next on tap in the docket.

Pablo Piovano FXStreet

The firm momentum around the European currency is helping EUR/JPY to advance to new monthly peaks in the area just above 124.00 the figure on Wednesday.

EUR/JPY in 6-week tops

EUR/JPY is advancing for the fifth consecutive session on Wednesday, extending the recent breakout of the 123.00 barrier amidst the continuation of the sell-off around the greenback and the generalized buying bias in the riskier assets.

In fact, investors keep favouring riskier assets after EU leaders gave green light to the European Recovery Fund (worth €750 billion) earlier in the week. In addition, monetary and fiscal stimulus in global economies continue to sustain the recovery post-pandemic, while news that a potential vaccine to eradicate the COVID-19 could be delivered in the next months also adds to the upbeat mood.

Data wise in the Japanese economy, the preliminary Manufacturing PMI is seen ticking higher to 42.6 in July, while a marginal improvement is also expected in the Services PMI.

In Euroland, ECB’s Christine Lagarde and Luis De Guindos will participate in events later in the session.

EUR/JPY relevant levels

At the moment the cross is gaining 0.68% at 123.94 and faces the next up barrier at 124.43 (2020 high Jun.5) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1). On the other hand, a drop below 121.14 (monthly high Mar.25) would expose 119.88 (200-day SMA) and then 119.31 (monthly low Jun.22).

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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