EUR/JPY looks bid and flirts with highs near 133.50

EUR/JPY’s upside momentum approaches 133.50.
Lack of volatility, declining yields sustain the consolidation.
Markets’ attention stays on ECB, US CPI (Thursday).

Pablo Piovano FXStreet

EUR/JPY keeps the trade within the daily range in the mid-133.00s against the backdrop of the broader consolidation in the global markets.

EUR/JPY looks to upcoming events

Despite the prevailing rangebound theme, EUR/JPY manages well to clinch the second consecutive session with gains and return to the area north of the 133.00 yardstick on Wednesday.

In the meantime, the soft note around the greenback lends extra legs to the European currency and in turn supports the upward move in the cross. The dollar weakness comes in response to weaker US yields, with the 10-year note breaking below the 1.50% mark for the first time since mid-March.

Investors, however, are expected to keep the cautious stance unchanged in the very near-term and ahead of the release of key US inflation figures gauged by the CPI and the interest rate decision by the European Central Bank (ECB), both due on Thursday.

Earlier in the session, the German trade surplus expanded to €15.9 billion in April (from €14.3 billion) and the Current Account surplus shrank to €21.3 billion during the same period (from €30.0 billion).

EUR/JPY relevant levels

So far, the cross is gaining 0.16% at 133.47 and a surpass of 134.12 (2021 high Jun.1) would pave the way for a test of 134.40 (monthly high Sep.2017) and then 134.50 (monthly high Oct.2017). On the other hand, the next support is located at 132.88 (monthly low Jun.7) followed by 132.52 (weekly low May 24) and finally 131.64 (weekly low May 12).

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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