- EUR / JPY manages to reverse the initial drop to 129.60.
- Lower US yields weigh on the dollar and push the yen higher.
- EMU, Germany’s flash manufacturing PMI surprised to the upside.
Despite mounting buying pressure around the Japanese yen, the EUR/JPY it manages well to keep daily gains close to the key hurdle of 130.00 so far on Friday.
EUR / JPY bounces away from 2-week lows
After bottoming out at fresh multi-day lows at the 129.60 / 55 zone, the EUR / JPY recovered some buying interest in response to the strong advance in the single currency, which in turn appears to be supported by the dovish dollar sell-off.
Indeed, US 10-year yields exceed levels last seen in mid-March at around 1.53%, putting the dollar under additional downward pressure and sponsoring new safe-haven entries. JPY.
The euro, meanwhile, regains its smile after the stability of the ECB on Thursday and the auspicious assessment of the region’s economy by the Governing Council.
On the euro agenda, manufacturing and flash services PMIs for the month of April beat estimates in France, Germany and the euro zone in general.
At the moment, the cross is up 0.11% to 129.84 and a breakthrough of 130.97 (April 20 high) would pave the way for a test of 131.00 (psychological level) and then 131.98 (July 17, 2018 high). On the downside, immediate containment stands at 129.37 (50-day SMA) followed by 128.29 (March 24 weekly low) and finally 127.85 (100-day SMA).