EUR/JPY flirts with the 126.00 mark, or daily highs

EUR/JPY pushes higher and targets the 126.00 level on Monday.
The risk-on sentiment remains firm and lifts the cross to daily tops.
EMU’s Industrial Production expanded more than expected in July.

Pablo Piovano FXStreet

The continuation of the buying bias in the risk complex is helping EUR/JPY to extend the recovery to the vicinity of 126.00 the figure at the beginning of the week.

EUR/JPY boosted by risk appetite

EUR/JPY is advancing for the fourth consecutive session on Monday and trades at shouting distance from the key 126.00 neighbourhood, always on the back of the sustained improvement in the mood surrounding the riskier assets.

This positive view is also reinforced by the downtrend in the greenback, which has breached the 93.00 support when measured by the US Dollar Index (DXY). The positive mood in the risk universe has been exacerbated after the ECB event last Thursday and particularly after the Governing Council talked down the recent appreciation of the euro.

In the data space, the Industrial Production in the euro bloc expanded 4.1% MoM during July and contracted nearly 8% over the last twelve months. Nothing scheduled across the pond, while the FOMC meeting on Wednesday is expected to be the most salient event this week.

EUR/JPY relevant levels

At the moment the cross is advancing 0.07% at 125.81 and faces the next up barrier at 127.07 (2020 high Sep.1) followed by 127.50 (2019 high Mar.1) and finally 129.25 (monthly high Dec.2018). On the other hand, a drop below 124.41 (weekly low Sep.9) would expose 124.28 (weekly low Aug.11) and finally 122.87 (monthly high Jan.16).

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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