EUR/JPY looks to test the 20-day SMA at 143.00
- EUR/JPY recovers from short lived correction, back near 143.00.
- Japanshort-livedes momentum as bonds trims gains.
- EUR/USD tests the upper limit of the current range, break could trigger more gains in the cross.
The e EUR/JPY is rising for the fourth consecutive day. On Asian hours the cross peaked at 142.93, the highest level since December 20. It then pulled back to as low as 142.11. The correction was short-lived and it resumed the upside.
The 143.00 area is on the radar. It is a round number and also where the 20-day Simple Moving Average stands. A firm break above could open the doors to more gains. A failure at current levels could trigger a deeper correction, probably toward the strong barrier at 141.20.
The EUR/JPY is recovering after hitting last week at 138.77, the lowest level since late September. The Yen surged after the Bank of Japan meeting, having the biggest daily gain in years and since then it has been trimming those gains.
On Tuesday, sovereign bond yields jumped, adding to Yen’s weakness. On Wednesday yields look steady while equity markets are mixed. Trading activity is subdued amid the holidays.
Price action in EUR/USD could impact the EUR/JPY. The pair is testing the upper limit of the current range. The first attempt is being followed by a retracement that could weigh on the cross. On the contrary, a rally above 1.0670 would help EUR/JPY bulls.
Technical levels