EUR/JPY looks firm, extends the upside past 131.00

EUR/JPY adds to Tuesday’s gains and surpasses the 131.00 mark.
The dollar's soft stance is sustaining upside for the cross.
US headline CPI failed to surprise markets in December.

Pablo Piovano FXStreet

The selling bias in the greenback is sustaining a better mood in the risk complex and pushing EUR/JPY to new multi-day highs near 131.50 midweek.

EUR/JPY poised for further upside

EUR/JPY is advancing for the second session in a row on Wednesday, and at the same time extending the recent breakout of the always relevant 200-day SMA, today at 130.53.

Further gains continue to be sustained by an improvement in the sentiment surrounding risk-associated assets, always at the back of the US dollar's persistent selloff.

US yields are trading on a mixed note with the belly of the curve drifting lower vs. the move up in the short and long ends of the curve.

The dollar's weakness came after US inflation figures failed to surprise markets, with the headline CPI rising 7.0% YoY in December and the Core CPI up 5.5% YoY, almost in line with investors’ expectations.

EUR/JPY relevant levels

So far, the cross has gained 0.26% and is at 131.41, whilst a surpassing of 131.60 (2022 high Jan.5) would expose 132.17 (Fibo level) and then 132.56 (high Nov.4 2021). On the downside, the next support comes in at 130.53 (200-day SMA) followed by 130.15 (weekly low Jan.10) and finally 130.02 (2022 low Jan.3).

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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