- The cross moved higher to the mid-125.00s, where lost momentum.
- The selling bias appears to have returned to EUR.
- EMU Industrial Production contracted more than expected in December.
After climbing as high as the 125.50/55 band during early trade, EUR/JPY has sparked some correction and is now navigating the 125.20 area.
EUR/JPY bolstered by JPY-weakness
The improved sentiment in the risk-on complex led by rising hopes of a US-China trade deal has been sponsoring the up move in the cross in the first half of the week, partially reverting last week’s moderate sell-off.
That said, the preference for riskier assets has exacerbated the selling bias in the Japanese safe haven, collaborating with the up move to the area beyond 125.00 the figure, where it has run out of steam on the back of renewed EUR weakness.
Previously, Industrial Production in the euro bloc contracted more than expected at a monthly 0.9% in December and 4.2% from a year earlier.
Early on Thursday, JPY is expected to be in centre stage in light of the release of preliminary GDP figures during Q4 2018.
EUR/JPY relevant levels
At the moment the cross is gaining 0.10% at 125.22 and a surpass of 125.53 (high Feb.13) would expose 125.94 (high Feb.4) and then 126.00 (55-day SMA). On the downside, immediate contention appears at 124.96 (10-day SMA) followed by 124.79 (21-day SMA) and then 123.78 (low Jan.25).