- Euro soars versus US dollar, boosts EUR/JPY to highest since mid-April.
- Month-end flow trigger volatility across the currency market.
A decline of the US dollar versus European currencies and a rally of the USD/JPY pair triggered a sharp move to the upside on EUR/JPY. The cross climbed from 115.75 to 117.31, reaching the highest level since April 16.
As of writing, it trades at 116.80/90, off lows but as volatility remains elevated. The US Dollar Index tumbled, reaching two-week lows under 99.00. The DXY slide was moderated by the USD/JPY rally.
Earlier on Thursday, the European Central Bank meeting kept interest rates unchanged and announced more easing measures. In the US, economic data continued to show rising unemployment and a 7.5% slide in personal spending in March. Developments around the ECB and US data were mostly ignored by market participants.
Technical outlook
The EUR/JPY took off from near three-year lows. It broke several short-term resistance areas. The upside eased around the 20-day moving average that stands at 117.10. If the euro consolidates on top, the technical outlook should point to an extension of the recovery.
The critical support is now 116.50. A slide of EUR/JPY below 116.50 should put it back into the 115.50/116.50 range with risks tilted to the downside.
Levels
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