EUR/JPY firmer, now targets the 126.00 area

• The cross extends the upside to the vicinity of 126.00.
• The weaker greenback sustains the better tone in EUR.
• Risk-on sentiment weighs on demand for JPY.

The better tone in the risk-associated complex is propping up the upside momentum in EUR/JPY, which is now targeting the critical barrier at 126.00 the figure.

EUR/JPY focused on Brexit, risk trends

The cross is up for the third session in a row so far on Wednesday, flirting with the key hurdle at the 126.00 handle although a break above this area still remains elusive.

The upbeat sentiment surrounding the riskier assets keeps weighing on the demand for the safe haven JPY so far this week and at the same time is lending support to the up move in the cross.

In the data space, Industrial Production in the broader euro area expanded at a monthly 1.4%, sharply rebounding from December’s 0.9% contraction and contracted 1.1% from a year earlier. Previously in the Asian session, Japanese key Tertiary Industry Activity Index expanded 0.4% inter-month, surpassing estimates.

Later in the day, risk appetite trends will look to another Brexit event as the House of Commons is expected to vote on a ‘no deal’ motion.

EUR/JPY relevant levels

At the moment the cross is gaining 0.05% at 125.75 facing the next up barrier at 125.96 (21-day SMA) seconded by 126.58 (100-day SMA) and finally 127.50 (2019 high Mar.1). On the other hand, a breach of 125.10 (55-day SMA) would aim for 124.27 (low Mar.8) and then 123.39 (low Jan.15).