EUR/JPY soars to 1-week highs above 133.00
- Euro extends gains across the board.
- JPY weakens amid risk appetite.
- EUR/JPY at 1-week highs.
The EUR/JPY pair accelerated sharply to the upside during the last hours. Since yesterday’s Asian session it has been moving to the upside and recently reached 133.23, the highest level in a week.
The bullish tone around the euro remains intact despite the low volume session. “There is a combination of factors lifting the euro. The recent data, including yesterday's flash PMI, suggests that the regional economy is re-accelerating here in Q4. Today's German IFO survey provides corroboration”, said analysts from BBH.
They also point out that the political situation in Germany has become less pessimistic. “One of the reasons that the current assessments may have softened is the political uncertainty since the elections two months ago that saw both of the main two parties draw the least voter support in modern times. While the attempt to forge a complicated coalition between the center-right CDU/CSU, the liberal (meaning pro-market) Free Democrats, and the Greens faltered, the Social Democrats are rising to the occasion and are now open to talks”.
The euro was the best performer of the week among majors while the yen posted mix results. Falling US bond yields and rising equity prices amid an improvement in risk appetite weakened the Japanese currency.
EUR/JPY at the moment trades at 133.15, up a hundred pips for the week. To the upside, resistance levels might be located at 133.45 (Nov 16 high), 133.85/90 (Oct high) and 134.15 (Oct 23 high). On the flip side, supports could be seen at 132.75, 132.45 (Nov 20 high) and 131.15/20 (weekly low).