- EUR/JPY extends the side-lined theme below the 126.00 mark.
- USD-weakness continues to support the upbeat mood in the cross.
- German, EMU Economic Sentiment surpassed estimates in September.
The persistent selling bias around the greenback is allowing EUR/JPY to extend the upside momentum albeit still below the key 126.00 barrier.
EUR/JPY focused on risk trends
EUR/JPY is extending the consolidative mood below the 126.00 mark on turnaround Tuesday, fading the pessimism seen at the beginning of the week and always supported by the better tone in the risk complex.
In fact, hopes of a COVD-19 vaccine plus the unabated offered bias surrounding the greenback are propping up Tuesday’s positive performance in the cross, which faces interim hurdle at the post-ECB peaks in the mid-126.00s.
In the docket, the key Economic Sentiment tracked by the ZEW survey came in above estimates in both Germany and the broader euro area at 77.4 and 73.9, respectively, for the month of September.
Later in the NA session, investors should closely follow the release of the Industrial/Manufacturing Production and Capacity Utilization in order to gauge the pace of the economic recovery in the US economy. Further data will show the NY Empire State index.
EUR/JPY relevant levels
At the moment the cross is advancing 0.14% at 125.60 and faces the next up barrier at 126.46 (weekly high Sep.10) seconded by 127.07 (2020 high Sep.1) and then 127.50 (2019 high Mar.1). On the other hand, a drop below 124.41 (weekly low Sep.9) would expose 124.28 (weekly low Aug.11) and finally 122.87 (monthly high Jan.16).