EUR/JPY pushing against 129.40 resistance area
- Euro recovery from 128.50 extends to the resistance area at 129.40.
- The yen loses ground as the US dollar picks up.
- EUR/JPY is testing the top of the last two days' trading range.
The euro has firmed up against the Japanese yen on Tuesday, regaining lost ground after hitting 128.50 low on Monday, to reach 129.35/40 resistance area.
The euro picks up against a softer yen
The common currency has taken advantage of yen weakness, with the USD/JPY bouncing up, fuelled by higher US Treasury bond yields and a moderate risk appetite that has weighed on the safe-haven JPY.
The benchmark US 10-year note has ticked up above the 1.5% mark for the first time in the last three trading days. This has fuelled demand for USD, pushing the Dollar Index from 93.65 lows back to levels past 94.00 for most of the day, although it has recently pulled back to 93.90 area.
On the macroeconomic docket, Eurozone services activity has been revised to 56.4 in September from the 56.3 preliminary reading in August although showing a certain slowdown in demand. Furthermore, Eurozone producer prices have continued increasing on the back of surging energy prices.
EUR/JPY remains trapped between 128.50 and 129.40
In a broader perspective, the pair is trading both sides of 129.00 following last week’s reversal from the 130.40 area. On the upside, immediate resistance lies at 129.40 (October 4 high,) above here, next targets are 130.00 and the area between 130.50 and 130.75 (September 3, 8, and 29 highs).
On the downside, immediate support lies at 128.50 (October 1 low) before 127.90/128.00 area (August 19, September 23 low) and then 127.30 (February 18 low).
Technical levels to watch