- EUR / JPY adds to gains well above 128.00 on Wednesday.
- The weaker Japanese yen sustains bullish momentum at the cross.
- US 10-Year Yields exceed the 1.40% level, new highs.
Increasing selling pressure on the Japanese yen is driving the EUR/JPY well above the 128.00 hurdle on Wednesday.
EUR / JPY strengthened on strong US yields.
EUR / JPY extends the rally for the second session in a row and trades closer to the key hurdle at 129.00, the area last visited in December 2018.
The strong rally in US yields reinforces the sell bias around the Japanese yen and further contributes to the rally in EUR/JPY, which is already trading its second consecutive week in positive territory.
Looking at the data, the German economy expanded 0.3% quarter-on-quarter in the fourth quarter, according to the latest GDP figures. On the US economic agenda, the second testimony from FOMC Chairman Powell is unlikely to enter a different tone than yesterday before Congress.
Technical levels
Right now, the cross is gaining 0.60% at 128.61 and is facing the next resistance at 128.79 (Feb 24, 2021 high) followed by 129.25 (Dec 13, 2018 high) and then 130.14 (Feb 24, 2021 high). November 7, 2018). On the other hand, a drop below 127.30 (February 17 high) would point to 126.10 (February 4 low) and finally 125.08 (January 18 low, 2021).
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