- EUR JPY hits new yearly highs near 131.70.
- Rising US yields keep the yen offered so far.
- The FOMC is expected to leave the policy unchanged.
Determined selling pressure on the Japanese yen continues to drive up the EUR/JPY, this time towards new 2021 highs in the area of 131.65 / 70.
EUR / JPY centered on the FOMC
EUR / JPY extends the weekly advance for the fourth consecutive session, although it is under some selling pressure shortly after posting new yearly highs near 131.70 earlier on Wednesday.
A further recovery in yields of the 10-year US benchmark in the 1.65% zone maintains selling pressure on the Japanese safe haven, which translates into additional tranches to EUR / JPY despite the supply observed around the European currency.
Meanwhile, the dollar remains on sale ahead of the FOMC event that will take place later in the European night. The consensus among traders has already ruled out any modification to current monetary conditions, although Chief Powell is expected to deliver an optimistic assessment of the US economy and the ongoing rally.
Earlier in the session, German consumer confidence followed by GfK fell to -8.8 for the month of May.
Relevant levels
So far, the cross is gaining 0.05% to 131.48 and a breakthrough of 131.67 (April 28, 2021 high) would pave the way for a test of 131.98 (July 17, 2018 high) and then 133.13 (July 17, 2018 high). September 21, 2018). On the downside, the next support emerges at 129.59 (50-day SMA) followed by 128.29 (March 24 weekly low) and finally 128.01 (100-day SMA).
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