- EUR / JPY adds to Tuesday’s gains and surpasses the 131.00 level.
- The soft stance of the dollar supports the upside at the cross.
- The US headline CPI did not surprise the markets in December.
The selling bias in the dollar supports the improved mood in the risk space and pushes the EUR/JPY to new multi-day highs near 131.50 midweek.
EUR / JPY ready to extend the rise
EUR / JPY advanced for the second consecutive session on Wednesday, at the same time extending the recent breakout of the always relevant 200-day SMA, today at 130.53.
Additional gains on the crossover continue to be supported by improving sentiment surrounding the risk space, always on the back of the persistent selloff in the US dollar.
Meanwhile, US yields are trading in a mixed tone with the bottom of the curve drifting against the bullish movement at the short and long ends of the curve.
Additional dollar weakness came after US inflation figures failed to surprise markets after headline CPI rose 7.0% yoy in December and core CPI rose 5.5% yoy, almost in line with investors’ expectations.
Technical levels
So far, the cross is gaining 0.26% at 131.41 and a breakthrough of 131.60 (Jan 5, 2022 high) would expose 132.17 (Fibonacci level) and then 132.56 (Nov 4, 2021 high). On the downside, the next support is at 130.53 (200-day SMA), followed by 130.15 (Jan 10 weekly low) and finally 130.02 (Jan 3, 2022 low).
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