EUR/JPY consolidates gains at 124.00 amid a favourable market mood
- EUR/JPY consolidates around 124 after hitting 13-month highs at 123.90.
- The euro completes a 10-day rally with the. Yen crushed by risk appetite.
- Resistance at 124.51 is the key level to watch now – Commerzbank.
The euro rose higher against the yen on Friday, with the yen vulnerable amid a risk-on mood that has boosted the pair to fresh one-year highs at 124.45. The euro is set to complete a 10-day winning streak, boosted by the ECB’s COVID-19 stimulus package and market hopes of a quick post-pandemic recovery.
The yen, crushed by the positive market sentiment
The safe-haven Japanese yen has been one of the worst performers this week, plunging 3.5% against the euro, nearly 2% against the US dollar and more than 5% against the British pound.
Macroeconomic figures are starting to show the first signs of economic recovery, a sentiment confirmed by the unexpected increase on the US Non-Farm Payrolls report on Friday, that has boosted hopes of an economic recovery in the second half of the year. This context has driven investors away from safe havens like the yen, aiming for riskier asses.
Furthermore, the European Central Bank’s decision to step up its coronavirus rescue fund and Germany’s 130 billion stimulus package, both announced this week, have eased concerns about another debt crisis in peripheral countries, increasing hopes of progress towards a fiscal union, that has strengthened the euro.
EUR/JPY: Next resistance now is 124.51 – Commerzbank
The pair has eroded the long-term downtrend, according to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, and is targeting 124.51, “This has been such a directional move the market is already approaching the 200-week ma at 124.51. This guards the 128.42 2014-2020 resistance line.”
EUR/JPY key levels to watch