EUR/JPY breaks above 126.00 to 8-week highs

• Euro heads for the highest close since late December against the yen.  
• Improvement in risk sentiment boosts EUR/JPY to break above 126.00 finally.

The EUR/JPY pair rose further during the U Session with the strength to break above the 126.00 barrier. The pair climbed to 126.25, reaching the highest level since December 31. As of writing, was holding near the top, consolidating gains and headed toward a close clearly above 126.00. The mentioned level capped the upside several times during February.  

The move to the upside took place amid an improvement in risk sentiment on the back of positive expectations about a deal between the US and China. The yen weakened on risk appetite while the euro benefit from higher Bund yields and after Fitch Ratings kept Italy’s grade unchanged.  

The technical outlook now points to further gains for EUR/JPY while above 126.00. A decline under 124.80/125.00 (uptrend line and horizontal support zone) would remove the positive outlook, leaving the euro vulnerable.  

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