- EUR/JPY meets daily resistance in the 128.20/25 band.
- The soft note in the dollar sustains the upside in the cross.
- German Business Climate surprised to the upside this month.
The continuous selling bias hitting the greenback lends further support to the riskier assets and lifts EUR/JPY back above the 128.00 mark on Monday.
EUR/JPY re-targets 128.50
EUR/JPY reverses Friday’s downtick and reclaims the 128.00 mark and above at the beginning of the week, always amidst the persistent buying bias surrounding the risk galaxy.
In fact, the usual reflation trade keeps underpinning the upside momentum in the cross pari passu with the increasing pace in the vaccine rollout across the world and firm prospects of a strong global recovery later in the year.
In the euro docket, positive results from the German Business Climate tracked by the IFO survey in February (92.4) collaborate further with the upside in the cross, which remains tempered by the renewed buying interest in the Japanese safe haven (on the back of declining US yields).
Data wise in the US, the Chicago Fed National Activity Index improved to 0.66 (from 0.41) for the month of January. Later in the session, ECB’s C.Lagarde will speak on ‘Stability, Economic Coordination and Governance in the EU’.
EUR/JPY relevant levels
At the moment the cross is gaining 0.30% at 128.10 and faces the next resistance at 128.45 (2021 high Feb.17) followed by 129.25 (monthly high Dec.13 2018 and then 130.14 (monthly high Nov.7 2018). On the other hand, a drop below 127.30 (weekly high Feb.17) would aim for 126.10 (monthly low Feb.4) and finally 125.08 (2021 low Jan.18).
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