EUR/JPY still stuck within a 126.00-127.00 range

EUR/JPY remains stuck within the same 126.00-127.00ish range it has been caught in since early December
The pair is likely to continue to derive impetus from the unfolding Covid-19 situation and other global themes.

Joel Frank Independent Analyst

Since breaking above a key area of resistance around 125.00 in early December 2020, EUR/JPY has been caught within a 126.00-127.00 range. Price action so far in 2021 has confirmed that this is still the case; the pair found solid support just ahead of the 126.00 level during the early part of the US session and has since advanced back to roughly 126.30. On the day, the pair trades flat.

Looking ahead, preliminary Eurozone CPI numbers for December will steal the limelight for the pair on Thursday and are likely to show a Eurozone still in deflation (for a sixth month running). Meanwhile, Overall Household Spending numbers and the Leading Economic Index on Friday out of Japan will be worth watching for JPY traders. Global risk appetite dynamics are likely to remain the main factors driving the pair, however.

Eurozone and Japan gripped by the pandemic

Both the Eurozone and Japan continue to struggle to contain the Covid-19 pandemic. Germany has this week announced an extension of its strict national lockdown to the end of the month, while most of the rest of the Eurozone continues with varying degrees of lockdown, and Japan is set to announce a state of emergency on Thursday. The Japanese government is also said to be mulling a halt of all foreign arrivals and a pause to business travel with South Korea and China.

While the near-term economic activity is set to remain under pressure from the high prevalence of the virus and lockdown restrictions in both regions, the Eurozone has a lead over Japan when it comes to vaccination; the Eurozone started administering the Pfizer/BioNTech vaccine at the end of December, while Japanese PM Yoshida Suga said on Monday that the vaccine would not be available in Japan until the end of February.

Rangebound EUR/JPY

A break below the bottom of EUR/JPY’s recent range at 1.2570-1.2600 would open the door for a move back towards a test of October and November 2020 highs around 125.00. Conversely, a break above recent highs just above the 127.00 level would pave the way for a move higher towards two-year highs above 128.00.

EUR/JPY 12 hour chart

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.