- Yen crash drives EUR/JPY towards recent highs zone.
- Bullish tone intact despite rise of almost 200 pips.
The EUR/JPY is rising sharply on Monday, fueled by the USD/JPY rally. The cross climbed to 137.12 after starting the week near 135.00, thus reaching the highest level since March 29.
The EUR/JPY’s bullish tone remains intact despite the magnitude of the rally. It is attempting to assert itself above 137.00, which if it occurs would pave the way for a test of last week’s peak at 137.55. A return below 135.30 on the other hand would take its toll and favor a test of last week’s lows at 134.25.
The EUR/JPY advance could end several days of sideways trading, in a range around 134.70/80. It remains to be seen whether this will lead to new current cycle highs or run out of steam again around 137.50.
The increases occur due to the continuation of the rise in US Treasury bond yields. The 10-year tranche set new highs in years before falling back to 2.74%, the same as the 30-year one that touched 2.80% before falling back to 2.76%.
In turn, the euro was relatively helped by the outcome of the French elections over the weekend. April 27 will be the second round between Le Pen and Macron. Should Le Pen rise in the polls, the euro could come under pressure.
Technical levels
Source: Fx Street
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