EUR/JPY stays bid above 127.00, new YTD highs

EUR/JPY adds to recent gains above 127.00.
The sell-off in the Japanese yen sustains the upside.
US 10-year yields keeps the dollar well bid.

Pablo Piovano FXStreet

The selling bias around the Japanese yen eclipses the corrective downside in the single currency and motivates EUR/JPY to advance to fresh peaks in the 127.30 area on Thursday.

EUR/JPY faces the next target at 127.50

EUR/JPY advances for the fourth consecutive session on Thursday, extending the recent breakout of the multi-week consolidative theme above the key barrier at 127.00 the figure. That said, the door now appears open for a potential move to the 2019 highs in the mid-127.00s.

The rebound in yields of the key US 10-year reference beyond the psychological 1.0% mark lends extra support to the buck vs. the Japanese yen, which in turn sustains the leg higher in the cross.

In the data space, flash inflation figures in Euroland for the month of December showed the lack of traction in consumer prices remains well and sound for the time being. In the US data space, Initial Claims rose by 787K WoW while the ISM Non-Manufacturing will be released later in the NA session.

EUR/JPY relevant levels

At the moment the cross is gaining 0.11% at 127.09 and faces the next hurdle at 127.30 (2021 high Jan.7) followed by 127.50 (2019 high Mar.1) and then 129.25 (monthly high Dec.13 2018). On the downside, a drop below 126.37 (21-day SMA) would aim for 125.70 (low Dec.16 2020) and finally 128.80 (55-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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