- EUR/JPY retakes the 118.00 handle and beyond.
- JPY depreciation, better mood in riskier assets lifts the cross.
- German IFO came in on a generalized positive tone this month.
After bottoming out in the 117.70 region on Monday, EUR/JPY managed to regain some composure and retake 118.00 the figure and beyond.
EUR/JPY higher on JPY-selling
The cross is finally seeing some respite on Tuesday following four consecutive daily pullbacks after being rejected from monthly tops in the 120.00 neighbourhood on September 13th. The area of monthly highs coincides with the key multi-month resistance line, today at 119.34.
Renewed hopes of fresh progress at the upcoming US-China trade talks in early October appear to have put the safe haven JPY under some selling pressure along with a mild recovery in US yields.
Adding to the ongoing correction higher, the German Business Climate came in a tad above estimates for the current month and helped EUR to shrug off some of Monday’s post-PMIs weakness.
Earlier in the session, BoJ’s H.Kuroda said that extra easing remains an option if the central bank assesses the economy is losing momentum. Kuroda also suggested that further scrutiny is needed to evaluate the costs of a protracted ultra-low rate context.
EUR/JPY relevant levels
At the moment the cross is advancing 0.14% at 118.38 and faces the next up barrier at 119.11 (55-day SMA) seconded by 120.01 (monthly high Sep.13) and then 120.52 (100-day SMA). On the flip side, a break below 117.75 (low Sep.23) would expose 117.55 (low Sep.12) and finally 115.86 (2019 low Sep.3).
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