EUR/JPY intermarket: risk-on takes the cross on a round trip

Currently, EUR/JPY is trading at 127.66, up 0.21% on the day, having posted a daily high at 127.89 and low at 126.48.

ECB: Market misjudged Draghi's speech on stimulus on Tuesday

EUR/JPY has recovered in a round trip from aforementioned highs and lows erasing an earlier drop after comments by Eurosystem officials damped speculation Mario Draghi had turned more hawkish. The US shift proving to be risk on with the ViX down to 10.1 and Treasury yields higher and strongest advance since January following Fed Chair Janet Yellen’s indication that the U.S. economy can withstand higher interest rates.

Yellen: Banking system is safer today – SocGen 

Draghi speech: 'Relatively confident' we will see improvement in productivity

The cross tracks Wall Street (higher on positive tones across the board) and today has been a perfect intermarket trade off:

• S&P 500 up 0.8% to 2,439
• Dow Industrials up 161 to 21,471
• Financials up 1.6% for third straight advance
• Industrial and material shares gain 1%
• Energy stocks up 0.8% with oil up 0.9%

Kuroda Speech: Investment in wage growth has been slow 

EUR/JPY levels

EUR/JPY is positive and the market looks set for further gains towards the 129.23 200 month ma and 129.55/130.71 50% retracement and the 200 week ma, according to analysts at Commerzbank. "We note the 13 counts on the intraday charts and would allow for a dip back to 126.50/125.80 ahead of further strength." A drop below 125.80 opens 125.40 and 125.50.