EUR/JPY holding in bullish territory, risk-on

EUR/JPY is trading in the 120.60s at the time of writing having moved within a range from 120.55 to a high of 120.71 following a corrective bid at the overnight lows of 120.09. The single currency has been robust, despite the ebbs and flows of risk-on and risk-off while the US dollar gives way across the board. 

Risk sentiment got a boost overnight on trade deal headlines which superseded the prior day's negative comments from US President Donald Trump. As the count down to the 15th Dec tariff deadline, in a Bloomberg article, it was reported from sources who would rather not be named, that a Sino/US trade deal was in the making and that there had been some movement closer to an agreement of a rollback on tariffs despite tensions over Hong Kong and Xinjiang. The news sent equities higher for which EUR/JPY is positively correlated to. 

European data in view

Meanwhile, eyes from here will be firmly placed on today's European data. The final estimate of Eurozone Q3 Gross Domestic Product is expected to remain at 0.2% for the quarter and 1.2% for the year. This fall in before next week's European Central Bank meeting and will be the first with Christine Lagarde at the helm.

ECB to hold

"We look for the ECB to hold policy steady, and have pushed back our forecast for rate cuts by one quarter to March and June 2020. With the Eurozone growth data having stabilised for now, there isn't any sense of urgency to ease further right away, leaving Ms Lagarde to focus on mending fences and building a consensus in her early days," analysts at TD Securities argued who said that they have pushed back their rate cut forecasts by one quarter and now look for 10bps depo rate cuts in March and June instead.

EUR/JPY levels