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  • EUR/JPY attracts some dip-buying near the 200-day SMA.
  • The risk-on mood weighed on the JPY’s safe-haven status.
  • The Euro remains on the defensive and might cap gains.

The EUR/JPY cross edged higher through the early European session on Thursday and is currently placed near the top end of its daily trading range, around the 121.00 round-figure mark.

The cross managed to attract some dip-buying near the very important 200-day SMA and has now recovered a major part of the previous session’s modest pullback from two-week tops, underpinned by the prevailing risk-on mood.

The upside seems limited

A further improvement in the global risk sentiment – amid optimism over progress towards finding treatment for the coronavirus – continued weighing on the Japanese yen’s perceived safe-haven status and extended some support to the cross.

It is worth mentioning that Sky News on Wednesday reported that UK scientists have made a ‘significant breakthrough’ in the development of a vaccine for coronavirus and China was said to have found an effective drug to treat affected people.

Meanwhile, the shared currency struggled to find any respite and remained on the defensive, which failed to provide any additional boost to the cross, rather might turn out to be a key factor capping any meaningful positive move, at least for now.

Hence, it will be prudent to wait for some strong follow-through buying before traders again start positioning for any further near-term appreciating move amid absent relevant market-moving economic releases on Thursday.

Technical levels to watch