- Euro is back above 130.00 and traces back most of the late February selloff.
- Risk appetite and higher US yields are hurting the Japanese yen.
- EUR/JPY is now targeting 130.30 and 130.75.
The Euro has extended its uptrend against the Japanese Yen on Wednesday, breaking the psychological level of 130.00 to hit fresh 3-week highs at 130.55.
Euro continues to recover against a weak yen
The common currency has appreciated almost 5% in the last week. The pair has managed to retrace most of the selloff seen in late February, after selling to 16-month lows in the 124.40 area.
The moderate appetite for risk observed in recent sessions in view of the hopes of an agreement between Russia and Ukraine to stop the war, and the announcement by China of new stimulus measures to support economic growth, have fueled the recovery of the euro against the safe haven yen.
Beyond that, hopes of a Federal Reserve rate hike later on Wednesday and the widening US-Japan yield spread have been hitting the yen over the past week.
EUR/JPY: The next targets on the upside are 130.30 and 130.75
From a technical point of view, the cross has been confirmed above the 6.8% Fibonacci retracement of the February-March decline at 129.80. Now the short-term focus is set at 130.30 (25 Feb high) and 130.70 (28 Feb high).
On the downside, a possible correction would seek support at 128.80 (2nd and 10th Mar highs) before later testing the January lows at 128.25 and 127.40 (10th Mar lows).
Technical levels
Source: Fx Street
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