EUR/JPY remains below key 61.8% Fib despite Fed-led risk rally

• Fed struck an outright dovish tone, sending risk assets higher.  
• The EUR/JPY pair is still struggling to beat a key Fibonacci hurdle.  

The EUR/JPY cross is not impressed by the Fed-led risk rally.

The currency pair is still trading below 125.27, which is the 61.8 percent Fibonacci retracement of the drop from 129.25 to 118.82. Notably, that level has caught highs on a daily closing basis in three out of the last four trading days.

The struggle to break past the key Fib is somewhat surprising, as the American equities put on a good show following a dovish Fed. For instance, the Dow Jone Industrial Average surged 434 points after the US central bank signaled counseled patience on rate hikes and said that “it is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments.”

Further, the Bank of Japan’s (BOJ) summary of opinions of January meeting released a few minutes before press time stressed the need to continue with the current powerful easing.

Even so, a convincing break above 125.27 remains elusive. However, an extended risk-on in Europe and a better-than-expected Eurozone preliminary CPI could end up pushing the pair well above that crucial resistance.

EUR/JPY Technical Levels