EUR/JPY trades on a firm note above 121.00

EUR/JPY moves above the 121.00 handle.
Final manufacturing PMI in Germany came in above estimates.
ECB’s C.Lagarde expected to speak later today.

Pablo Piovano FXStreet

The selling bias in the Japanese safe haven is propping up the up move in EUR/JPY to the area above the 121.00 handle, printing at the same time new 2-day highs.

EUR/JPY now looks to ECB

The cross is adding gains to Friday’s price action and it has surpassed the key barrier at 121.00 the figure in tandem with the increasing selling mood in the Japanese safe haven.

The rebound in yields of the US 10-year note to the 1.75% region and beyond has been sustaining the decline in the Japanese safe haven and in turn supporting the upside momentum in the cross.

Additionally, better-than-expected manufacturing PMIs in core Euroland helped the sentiment along with the improvement in the Sentix index, which gauges the Investors’ Confidence in the euro bloc.

Later in the day, the new ECB President C.Lagarde will speak in Berlin.

What to look for around JPY

At the moment, the exclusive driver behind the price action around the Japanese Yen is expected to come from developments in the protracted trade war between the US and China and its impact on the global growth outlook. Against this backdrop, the BoJ could see its intentions to push domestic inflation towards the bank’s target threatened as well as its mega-loose monetary stance if the currency unexpectedly appreciates beyond welcomed levels.

EUR/JPY relevant levels

At the moment the cross is gaining 0.26% at 121.09 and faces the next up barrier at 121.47 (monthly high Oct.31) seconded by 122.07 (200-day SMA) and then 123.35 (monthly high Jul.1). On the other hand, a breach of 120.28 (low Oct.31) would expose 119.65 (100-day SMA) and finally 118.83 (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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