EUR/JPY moves above 126.00 on improved risk appetite

EUR/JPY gathers extra pace and leaves behind the 126.00 area.
The sell-off in the dollar boosts the momentum around EUR.
Markets’ attention is focused on US Initial Claims later in the session.

Pablo Piovano FXStreet

The upside momentum in the European currency is lending extra wings to EUR/JPY, pushing it to fresh highs in the 126.70/75 band, levels last seen in April 2019.

EUR/JPY stronger on risk trends

EUR/JPY is posting gains for the third straight session on Thursday, gaining already more than 2% since weekly lows in the 124.30 zone recorded on Tuesday. Furthermore, the cross navigates its fifth consecutive week in the positive territory, leaving behind the key 200-week SMA near 124.90.

The persistent weak note in the greenback in combination with the somewhat steady performance of the Japanese yen are bolstering the demand for riskier assets and underpin at the same time the upside momentum in the cross.

In the euro docket, German final CPI showed prices contracted 0.5% MoM and 0.1% on a year to July. Later in the session, the greenback is expected to remain under the microscope in light of the publication of the weekly Initial Claims.

EUR/JPY relevant levels

At the moment the cross is gaining 0.53% at 126.64 and faces the next up barrier at 126.75 (2020 high Aug.13) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1). On the flip side, a drop below 122.87 (monthly high Jan.16) would expose 121.14 (monthly high Mar.25) and then 120.18 (200-day SMA).

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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