• EUR/JPY advances to new tops beyond 128.00 the figure.
  • Further JPY-selling continues to lend wings to the rally.
  • Softer dollar supports the risk-on mood in global markets.

The rally in EUR/JPY remains unabated, quickly leaving behind the key barrier at 128.00 and recording at the same time new 2021 highs.

EUR/JPY bolstered by JPY-weakness

EUR/JPY trades in the positive territory for the sixth consecutive session and reaches levels last seen in December 2018 above the 128.00 yardstick on turnaround Tuesday.

As usual in past sessions, the upbeat tone in the risk galaxy coupled with the increasing selling bias surrounding the Japanese safe haven collaborate with the sharp upside in the cross.

In fact, higher US yields – particularly the 10-year reference – keep bolstering the offered stance in the Japanese yen and therefore adds extra legs to the rally in EUR/JPY.

Further buying interest in the European currency came after the Economic Sentiment in both Germany and the broader Euroland surpassed estimates in February, as per the latest ZEW survey figures. In addition, flash Q4 GDP figures also came in a tad above consensus.

In Japan, earlier data saw the key Tertiary Industry Activity Index contracting 0.4% MoM, trimming the previous 0.6% drop.

EUR/JPY relevant levels

At the moment the cross is gaining 0.35% at 128.22 and faces the next up barrier at 128.33 (2021 high Feb.16) followed by 129.25 (monthly high Dec.13 2018 and then 130.14 (monthly high Nov.7 2018). On the other hand, a drop below 127.49 (monthly high Jan.7) would aim for 126.10 (monthly low Feb.4) and finally 125.08 (2021 low Jan.18).

Source