EUR/JPY keeps the tight range above 120.00
- EUR/JPY has managed to rebound from sub-120.00 levels.
- Global focus remains on the Chinese coronavirus.
- Powell, Lagarde, data to drive sentiment this week.
After a brief test of sub-120.00 levels during early trade, EUR/JPY has managed to stabilize somewhat in the 120.15/20 band.
EUR/JPY looks to virus, data
The cross has regained some buying interest at the beginning of the week and is looking to extend further the recovery following Friday’s moderate sell-off.
In fact, somewhat diminishing concerns around the Wuhan coronavirus appear to have lent some legs to the risk complex at the beginning of the week. This, coupled with some profit taking mood surrounding the greenback is keeping the riskier assets mildly bid on Monday.
Moving forward, headlines around the coronavirus are expected to remain in centre stage when comes to determine the direction of risk appetite trends in collaboration with speeches by ECB’s C.Lagarde, testimonies by Fed’s J.Powell and key US data releases.
In the data universe, the Japanese Current Account surplus shrunk less than expected to a non-seasonally-adjusted 0.524¥ trillion (from ¥1.437 trillion) during December. Closer to home, Italian Industrial Production slumped at a monthly 2.7% during the last month of 2019 while the Sentix index in the broader euro area came in at 5.2 for the current month, bettering estimates despite a tad lower than January’s.
EUR/JPY relevant levels
At the moment the cross is gaining 0.06% at 120.18 and faces the next hurdle at 121.15 (weekly high Feb.5) followed by 121.38 (monthly low Dec.13 2019) and then 122.87 (2020 high Jan.16). On the flip side, a drop below 119.97 (weekly low Feb.10) would expose 119.77 (2020 low Jan.30) and finally 119.65 (low Nov.25 2019).