EUR/JPY gains momentum, hits 126.00 and holds in bullish pattern
- Stronger Euro favors rebound in EUR/JPY from key support.
- On a quiet session, pair holds bullish tone, testing 126.00.
The EUR/JPY pair is up on Monday, recovering from last week losses. The Euro today is among the top performers, improving after falling sharply last week on the back of weaker Eurozone economic data.
A quiet day, mixed results
The Euro is rising across the board while the yen remains flat, boosting modestly the EUR/JPY pair on a low volatility session. It climbed to 125.98, reaching the highest since Thursday. It is bouncing from last week lows. The move to the upside could be the beginning of a new trip to 126.80.
For the Euro to move higher, EZ data should not disappoint and risk sentiment remain positive. In Japan, the key event will be the Bank of Japan meeting on Thursday. Also, US data could have an impact on the pair. The relevant report ahead is on Friday with the first estimate of Q1 GDP.
Ascendant channel intact
The retreat from levels near 127.00 found support so far around 125.60, a horizontal level and also on top of an uptrend line from March lows. Price continues to move in the channel with a bullish tone. Still close to the key support but it is bouncing. If it remains in the pattern above 126.00 it will likely rise to test the next resistance at 126.20. A consolidation on top would clear the way for 126.50.
To the downside, a break under 125.60 would be a clear negative signal for the Euro and would to further losses, potentially targeting 124.90.