- EUR/JPY regains the smile above the 129.00 mark.
- US yields lose momentum and weigh on the dollar.
- EMU’s flash Q4 GDP came in at -0.7% QoQ, -4.9% YoY.
The moderate correction lower in US yields prompt a knee-jerk in the dollar and spark a rebound in the risk-associated galaxy on turnaround Tuesday.
EUR/JPY higher on EUR-buying
EUR/JPY reverses two consecutive daily pullbacks and manage to regain some upside traction in response to the moderate rebound in the single currency.
In fact, the better mood around the euro comes in tandem with the corrective downside in US yields, which in turn triggers a move lower in the buck.
Furthermore, yields of the US 10-year reference dropped to the 1.52% area during early trade after surpassing the 1.60% level at the end of last week, area last traded in February 2020.
In the Japanese docket, Q4 GDP figures showed the economy expanded 2.8% QoQ during the October-December period and 11.7% when comes to annualized figures. Both prints came in below estimates.
In the euro area, the German trade surplus widened to €22.2 billion in January, while advanced GDP figures for the broader Euroland noted the economy is now seen contracting 0.7% QoQ and 4.9% from a year earlier.
EUR/JPY relevant levels
At the moment the cross is gaining 0.33% at 129.36 and faces the next resistance at 129.87 (2021 high Feb.24) followed by 130.00 (psychological level) and then 130.14 (monthly high Nov.7 2018). On the other hand, a drop below 128.18 (weekly/monthly high Mar.2) would aim for 127.30 (low Feb.17) and finally 127.11 (50-day SMA).
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