EUR/JPY Breaks Above the 124.780 Resistance Mark – An Update on the Signal!
Arslan Butt • 2 min read
The EUR/JPY currency pair is currently trading at 124.88, and consolidating in a range between 124.38 and 124.95. Moving on, the traders seem cautious about placing any strong positions, ahead of the Preliminary Eurozone CPIs.
The market trading sentiment managed to regain its lost ground, turning bullish as investors welcomed the release of China’s upbeat Caixin Manufacturing PMI for November, which boosted hopes over economic recovery in China. This became the key factor that has helped to stop the bearish rally in the market trading sentiment. On the data front, China’s Caixin Manufacturing Purchasing Managers Index (PMI) for November came in at 54.9, which was up from 53.6 in October. As a result, the US equity futures started to flash green, which tends to undermine the demand for traditional safe-haven assets, like the Japanese yen, and contributes to gains for the currency pair.
As a result, the broad-based US dollar failed to extend its gaining streak of the previous day, coming under pressure on the day, as doubts continue over economic recovery from COVID-19 in the the US. Meanwhile, the hopes of an extension to the monetary easing program, triggered after Fed Chair Jerome Powell and Treasury Secretary Steve Mnuchin both showed readiness for the approval of further stimulus to help the economic growth, also undermined the greenback. Besides this, the promising data from COVID-19 vaccine developers urged investors towards riskier currencies and higher-yielding assets, rather than safe-havens, which eventually led to losses in the safe-haven US dollar. The losses in the greenback have become a key factor that has kept the currency pair higher. Meanwhile, by 9:27 PM ET (1:27 AM GMT), the US Dollar Index Futures, which tracks the greenback against a bucket of other currencies, had dropped by 0.12%, to 91.903.
Daily Support and Resistance
Pivot Point 124.62
The EUR/JPY is trading bullishly at the 124.940 level, having crossed over an immediate resistance level of 124.900. The resistance level of 124.900 is extended by a double top level, which has now been violated, and this could open further room for buying, until the next target level of 125.530. Good luck!