EUR/JPY rebounds from lows near the 123.00 mark

• EUR/JPY adds to Tuesday’s gains above the 123.00 handle.
• The better tone around EUR supports the upside.
• FOMC minutes expected to rule the mood later in the day.

The now improved mood in the risk-associated space is pushing EUR/JPY to advance further north of 123.00 the figure.

EUR/JPY higher on risk-on pick up

The greenback is now shedding part of recent gains and is supporting the rebound in the demand for the European currency, helping at the same time with the bounce in the cross off daily lows in the 123.00 neighbourhood.

In addition, the cross is up for the second session in a row so far today, coming a bit lower after meeting initial resistance near the 21-day SMA in the 123.70/75 band on Tuesday although within the gradual recovery from multi-month lows near 122.00 the figure seen earlier in the month.

In the data space, the FOMC minutes will be released later today and are expected to keep the buck under some pressure in the very near term. Earlier in the day, Japanese trade surplus shrunk to ¥60.4 billion in April following another drop in exports (2.4% on a yearly basis) and a stronger-than-expected pick up in imports (6.4% over the last twelve months).

EUR/JPY relevant levels

At the moment the cross is gaining 0.10% at 123.42 and faces initial resistance at 123.75 (high May 21) followed by 124.29 (high May 6) and finally 124.79 (55-day SMA). On the other hand, a breach of 122.08 (low May 15) would aim for 120.54 (monthly low Jan.17 2017) and then 118.82 (2019 low Jan.3 ‘flash crash’).