EUR/JPY firmer, looks to regain 124.00

EUR/JPY is attempting to recover some ground lost after yesterday’s sharp pullback to the 123.60 region.

EUR/JPY up on risk-on sentiment

The pick up in the risk aversion on Wednesday gave extra oxygen to the safe haven JPY, forcing the cross to recede from the area of recent tops and retreat to the 123.60 area, where some buying interest seems to have re-emerged.

On the opposite side, the better tone around the risk-associated space today is encouraging investors to abandon the Japanese currency in favour of the riskier EUR, sparking the current squeeze higher.

In the data space, advanced GDP figures in Japan expect the economy to expand 0.5% QoQ and 2.2% on a yearly basis, surpassing initial estimates.

On the EMU’s data front, the ECB will publish its minutes of the April meeting, while board members Y.Mersch, E.Nowotny and S.Lautenschlaeger are due to speak followed by the speech by President M.Draghi.

EUR/JPY relevant levels

At the moment the cross is gaining 0.04% at 123.73 facing the next up barrier at 125.41 (high May 17) seconded by 125.83 (2017 high May 16) and finally 126.50 (high Apr.28 2016). On the downside, a breach of 123.59 (low May 17) would expose 123.26 (low May 12) and then 122.65 (20-day sma).