- EUR / JPY advances to new highs beyond 128.00.
- More JPY sales continue to fuel the rally.
- The weaker dollar supports risk appetite in global markets.
The rally of EUR/JPY has not declined, quickly leaving behind the key barrier at 128.00 while recording new 2021 highs.
EUR / JPY strengthened by JPY weakness
EUR / JPY is trading in positive territory for the sixth consecutive session, reaching levels last seen in December 2018 above 128.00 on Tuesday’s change in trend.
As usual in previous sessions, the optimistic tone in the risk space together with the growing selling bias surrounding the Japanese safe haven contribute to the strong rise of the cross.
In fact, higher US yields, particularly the 10-year benchmark, continue to reinforce the stance offered in the Japanese yen and thus add additional wings to the EUR / JPY rally.
Additional buying interest in the European currency came after economic sentiment in both Germany and the wider euro zone beat estimates in February, according to the latest ZEW survey figures. Additionally, preliminary fourth-quarter GDP figures were also slightly above consensus.
In Japan, based on previous data, the tertiary industry key activity index contracted 0.4% month-on-month, cutting the previous drop of 0.6%.
Relevant levels
Right now, the cross is gaining 0.35% to 128.22 and is facing the next upward barrier at 128.33 (February 16, 2021 high) followed by 129.25 (December 13, 2018 monthly high and then 130.14 (monthly high). November 7, 2018) A drop below 127.49 (January 7 monthly high) would point to 126.10 (February 4 monthly low) and finally 125.08 (January 18, 2021 low).
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