- The EUR / JPY rally extends beyond 122.00 to approach the 2020 high at 122.85.
- The euro appreciates the optimism of the market and the hopes of recovery from the ECB.
- EUR / JPY targets 55 weeks at 124.42 – Commerzbank.
The euro has accelerated its rally against the Japanese yen and is expected to record an 8-day winning streak to regain all the ground lost in the previous five months. The pair surpassed 122.00 on Wednesday, the yen hammered by risk appetite, hitting levels just below the 2020 high of 122.85.
ECB recovery and hopes for economic recovery boost euro
The market has welcomed reports that the European Central Bank is ready to step up its asset purchase program against coronaviruses by increasing bets on the euro. The ECB would increase the program by € 750 billion, adding another € 500 billion, to support the countries and sectors most affected by COVID-19.
In addition, the prevailing risk appetite, supported by the hope that the reopening of the major economies will accelerate the global recovery and a better than expected set of macroeconomic indicators are pushing investors towards riskier assets, weighing on the yen safer Japanese.
EUR / JPY pair targets 55-week Monday at 124.42 – Commerzbank
Karen Jones, FICC Technical Analysis Research team leader at Commerzbank, sees the pair reaching a higher level: “Please note that May was a reversal of the key month and that we should see a higher breakout – this would target 124.42 55 weeks ma and 130.65 200- week mon. “