EUR/JPY surges beyond 122.00, nears 12-month high at 122.85
- EUR/JPY rally extends beyond 122.00 to approach 2020 high at 122.85.
- Euro appreciates on market optimism and ECB stimulus hopes.
- EUR/JPY to target the 55-week ma at 124.42 – Commerzbank.
The euro has accelerated its rally against the Japanese yen and is set an 8-day winning streak to regain all the ground lost over the previous five months. The pair has breached 122.00 on Wednesday, with the yen hammered by risk appetite, reaching levels right below 2020 high at 122.85.
ECB stimulus and economic recovery hopes boost the euro
The market has welcomed news reports suggesting that the European Central Bank is ready to scale up its coronavirus assets purchase program increasing bets on the euro. The ECB would raise the 750-billion-euro program, adding another 500 billion, to support the COVID-19 worst-hit countries and sectors.
Furthermore, the prevailing risk appetite, supported by hopes that the re-opening of the major economies will accelerate global recovery and a set of better than expected macroeconomic indicators are driving investors towards riskier assets, weighing on the safer Japanese yen.
EUR/JPY to target the 55-week ma at 124.42 – Commerzbank
Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, sees the pair reaching higher, “Please note that May was a key month reversal and we should see a break higher – this would target the 124.42 55-week ma and the 130.65 200-week ma.”
EUR/JPY key levels to watch