EUR/JPY looks firmer, approaches 2021 highs

FX
  • EUR/JPY adds to recent gains above 133.00
  • The selling bias in the dollar lends wings to the euro.
  • German final Q1 GDP contracted 1.8% QoQ, 3.4% YoY.

The softer note surrounding the greenback lifts the demand for the single currency and lifts EUR/JPY further north of the 133.00 mark on Tuesday.

EUR/JPY stronger on firm risk appetite

EUR/JPY advances for the second session in a row on Tuesday and extends the positive note at the beginning of the week.

In fact, the broad-based risk-on sentiment keeps the dollar depressed and bolsters the buying bias in the risk complex, motivating the cross to trade at shouting distance from YTD peaks around 133.40.

Adding to the negative tone in the dollar, yields of the US 10-year reference slip back to the sub-1.60% area so far, extending the downtrend since last week’s tops around 1.70%.

In the euro docket, the German economy contracted 1.8% QoQ during the January-March period and 3.4% over the last twelve months. In addition, the German IFO survey showed the Business Climate improved to 99.2 for the month of May, surpassing expectations.

Later in the NA session, the Consumer Confidence will take centre stage seconded by housing data and the weekly report by the EIA on crude oil supplies.

EUR/JPY relevant levels

So far, the cross is gaining 0.33% at 133.24 and a surpass of 133.43 (2021 high May 19) would pave the way for a test of 133.48 (monthly high Apr.2018) and then 134.00 (round level). On the downside, the next support at 131.64 (weekly low May 12) seconded by 130.98 (monthly low May 5) and finally 130.84 (50-day SMA).

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