- EUR / JPY adds to the recent gains above 127.00.
- The sell off of the Japanese yen sustains the rise.
- US 10-year yields keep the dollar well offered.
The sell bias around the Japanese yen overshadows the downward correction in the single currency and motivates the EUR/JPY to advance to new highs in the 127.30 area on Thursday.
EUR / JPY faces next target at 127.50
EUR / JPY advanced for the fourth consecutive session on Thursday, extending the recent multi-week consolidation break above the key barrier at 127.00. With that said, the door now looks open for a possible move to the 2019 highs at 127.50.
The rally in yields of the key US 10-year benchmark beyond the 1.0% psychological level provides additional support for the dollar against the Japanese yen, which in turn sustains the rise at the cross.
In the data space, flash inflation figures in Euroland for the month of December showed that the lack of traction in consumer prices remains good and solid for now. In the US data space, initial weekly claims increased by 787,000, while the non-manufacturing ISM will be released later in the US session.
Technical levels
Right now, the cross is gaining 0.11% to 127.09 and faces the next hurdle at 127.30 (Jan 7, 2021 high) followed by 127.50 (Mar 1, 2019 high) and then 129.25 (March 13, monthly high). December 2018). On the downside, a drop below 126.37 (21-day SMA) would point to 125.70 (Dec 16, 2020 low) and finally 128.80 (55-day SMA).
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