- The EUR / JPY flirts with the 55-day SMA around 124.70 / 80.
- Risk sentiment weighs on the yen as a safe haven.
- Rumors of stimulus continue to fuel the space associated with risk.
The persistent optimistic mood surrounding the riskiest assets fueled the strong advance in the EUR/JPY near the key barrier 125.00.
EUR / JPY watch out for risk trends, data
EUR / JPY rose for the third straight session on Tuesday and further extends the bounce from last week’s lows at 123.00, where solid containment appears to have emerged so far.
In fact, market rumors surrounding a fiscal stimulus package are keeping investor sentiment and further selling pressure on the Japanese yen, particularly after Treasury Secretary S. Mnuchin and the Speaker of the House Representative N. Pelosi said talks could resume sometime later on Tuesday. .
Looking at euro bloc data, the August current account surplus fell to € 21.8 billion in August (from € 25.5 billion). Later in the American session, building permits and home starts will take center stage alongside speeches by R. Quarles and C. Evans from the FOMC.
Relevant levels
At this time, the cross is gaining 0.59% at 124.79 and faces the next barrier at 125.08 (monthly high of October 9) seconded by 126.46 (weekly high of September 10) and then 127.07 (high of September 1, 2020) . On the downside, a move below 123.48 (100-day SMA) would target 123.01 (October 15 monthly low) and finally 122.37 (September 28 monthly low).
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Credits: Forex Street
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