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  • Risk appetite continues to drive EUR/JPY higher.  
  • Euro head for highest weekly close since June against the yen.  

The EUR/JPY remains strong into the American session, supported by a rally of EUR/USD and by risk appetite. The euro just reached 122.47, the highest level in two weeks.  

As of writing trades at 122.35, up 120 pips for the week and about to post the highest daily close since July. After rising during two consecutive trading days, EUR/JPY is back near December top.  

The positive tone remains supported by risk appetite. After a record close yesterday, Wall Street indexes are rising again on Friday as the Christmas rally goes on. The move higher in EUR/JPY is being limited by a steady USD/JPY. The decline in US yields contributes to support somewhat the Japanese yen.  

Technical outlook  

The EUR/JPY holds a strong bullish tone. It is testing the 122.40 area and a consolidation on top would clear the way for a test of December highs at 122.60/65. The next medium-term resistance might be seen at 123.80.  

The positive outlook for the euro is likely to remain in place as long as it holds on top of 121.20, the 20-day moving average. A close below would leave the pair vulnerable to more losses.