EUR/JPY in recovery-mode, flirts with daily highs near 125.50

EUR/JPY leaves behind recent weakness and advances to 125.50.
The better mood in the riskier assets props up the cross.
Investors’ focus remains on the key ECB event on Thursday.

Pablo Piovano FXStreet

After briefly testing the key support area near 124.40 in early trade, EUR/JPY has managed to regain buying interest and is now hovering around the mid-125.00s.

EUR/JPY bounces off 4-week lows

EUR/JPY reclaims the positive territory for the first time after six consecutive daily pullbacks on Wednesday, including a test of multi-week lows in the 124.40 region.

The better tone in the risk-associated complex is helping the cross to leave behind part of the recent multi-session decline and test at the same time the 100-hour SMA in the 125.45/50 band.

Extra buying pressure around the European currency came after some ECB officials suggested the firm pace of the economic recovery in the region could reduce the need for extra monetary stimulus in the next months.

In the docket, nothing worth mentioning in Euroland or Japan, while JOLTs Job Openings and the API’s report on US crude oil inventories are next on tap on the US data universe.

EUR/JPY relevant levels

At the moment the cross is advancing 0.49% at 125.44 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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