- EUR/JPY reverses the downside and clinches 121.00.
- Solid EUR and JPY-selling prop up the upside in the cross.
The buying pressure around the European currency in combination with the now softer tone surrounding the Japanese safe haven are now pushing EUR/JPY to fresh daily highs in the 121.00 neighbourhood.
EUR/JPY flirts with the 200-day SMA around 121.00
After four consecutive daily losses, the cross found some respite at the beginning of the week on the back of the resumption of the buying bias in the shared currency. Furthermore, the recent strength around the Japanese yen appears somewhat subdued today and is also collaborating with the upside momentum in the cross.
It is worth recalling that the recent and strong appreciation of the Japanese yen came in response to the shift of the investors’ sentiment towards the safer assets, all following the US drone strike (Thursday) that killed an Iranian commander, sparking threats of war and retaliatory actions from both countries.
Also adding to the positive momentum in the euro, the Sentix index, German Retail Sales, EMU Producer Prices and Services PMI all came in above expectations. On the opposite side, the Japanese manufacturing PMI dropped to 48.4 in December, coming in short of estimates.
EUR/JPY relevant levels
At the moment the cross is gaining 0.35% at 121.02 and faces the next up barrier at 121.31 (21-day SMA) seconded by 122.23 (monthly high Dec.23 2019) and then 123.35 (monthly high Jul.1 2019). On the other hand, a breach of 120.16 (2020 low Jan.3) would expose 119.65 (100-day SMA) and finally 119.24 (monthly low Nov.14).
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