- EUR / JPY adds to Tuesday’s gains around 130.00.
- US yields recover and keep JPY selling mood.
- The markets’ attention remains on Thursday’s ECB event.
The selling pressure on the Japanese currency maintains the recovery of the EUR/JPY good and solid on Wednesday.
EUR / JPY bounces away from 128.50
After a brief dip to fresh 4-month lows near 128.50 on Tuesday, the EUR / JPY managed to regain buying interest thanks to the moderate recovery in US yields and the eventual selling bias of the Japanese yen.
In fact, US 10-year yields are back to the smile and 1.28% region after bottoming out at levels last seen in February, around 1.13% on Tuesday.
Meanwhile, the dollar shows some volatility and fuels the rally in the single currency ahead of the ECB’s key event on Thursday.
On the latter, the consensus among operators expects the central bank to maintain or even improve the current mega-accommodative stance of monetary conditions in the euro area.
So far, the cross is gaining 0.46% to 129.95 and a break of 130.01 (weekly high on July 21) would expose 131.08 (weekly high on July 13) and then 132.43 (monthly high on July 1). On the downside, immediate support is located at 128.59 (July 20 monthly low) followed by 128.54 (61.8% Fibonacci from the January-June rally) and finally 128.37 (200-day SMA).