EUR/JPY retakes 121.00 handle, risk-on likely in Europe

Omkar Godbole FXStreet Contributor

EUR/JPY rose above 121.00 levels in Asia as Macron’s victory in the first Presidential debate strengthened the bid tone around the common currency.

The cross clocked a low of 120.65 in early Asia after failing at 121.40 levels on Monday.

Risk-on in Europe

The rally in the cross in the Asian session suggests the equity markets in Europe are more likely to cheer Macro’s win and more importantly Le Pen’s loss in the Presidential debate.

The odds of Le Pen victory dropped last week after Dutch election results signaled ‘peak populism’. The anti-EU candidate’s poor showing at the Presidential debate could weigh over Franco-German yield spread; keep EUR in demand and the safe haven Yen on the back foot.

EUR/JPY is likely to act as a barometer of risk sentiment in the markets in the run up to French elections.

EUR/JPY Technical Levels

The cross was last seen trading around 121.19 levels. A break above 121.34 (5-DMA) would expose 121.54 (10-DMA). A violation there would open up upside towards 122.25 (Mar 17 high). On the other hand, a breakdown of support at 121.00 (zero figure + 50-DMA) could yield a sell-off to 120.44 (100-DMA) and possibly to 120.00 (zero figure).

1. R3 121.40
2. R2 121.28
3. R1 121.17
PP 121.05
1. S1 120.93
2. S2 120.82
3. S3 120.70

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Expanding
1H	Strongly Bearish	Neutral	High
4H	Bearish	Neutral	Expanding
1D	Bearish	Neutral	High
1W	Bearish	Neutral	Low
Updated Mar 20, 23:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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