EUR / JPY extends its recovery even further and approaches 130.00

• EUR / JPY adds to the recent gains around 130.00.
• Higher yields sustain the selling bias of the Japanese yen.
• Advanced US GDP in the fourth quarter stood at 4.1%.

Enhanced mood in space associated with risk gives additional wings to the EUR/JPY and pushes it to levels just below 130.00.

EUR / JPY at 2021 highs near 130.00

EUR / JPY advanced for the third consecutive session driven by the selling mood of both the dollar and the Japanese yen in the second half of the week.

In fact, the strong rally in US 10-year yields to levels last seen a year ago well above 1.40% motivates sellers to keep the mood around the Japanese safe haven in check. , while the dollar sees its fall exacerbated to lows of several weeks. when tracked by the US dollar index (DXY) amid the vigorous resumption of reflation trading.

Dollar weakness has gained momentum of late in response to President Powell’s dovish message in his two speeches on Capitol Hill earlier in the week.

Data-wise, GfK’s consumer climate in Germany improved to -12.9 for the month of February, while the US calendar results showed that US GDP is expected to have expanded. 4.1% QoQ in the fourth quarter and initial claims increased by 730,000 weekly. In Japan, both the coincident indicator and the leading index surprised to the upside in January, contracting 0.7% and 0.8%, respectively, on a monthly basis.

Technical levels

Right now, the cross is gaining 0.78% at 129.76 and facing the next resistance at 129.87 (2021 high on Feb 24) followed by 130.00 (psychological level) and then 130.14 ( monthly maximum of November 7, 2018). On the other hand, a drop below 127.30 (weekly maximum on February 17) would point to 126.10 (monthly minimum on February 4) and finally 125.08 (minimum of 2021 on January 18).