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FOREX: EURJPY Extends Recovery, Rises 1% Back Above 161.00

FOREX
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  • Higher core yields have further weighed on the Japanese Yen on Friday, boosting the latest USDJPY recovery comfortably back above 153.50, to the highest level since November 26. In similar vein, outperformance for the single currency has prompted a sharp 1% rally for EURJPY, with the cross briefly reaching initial resistance at the 50-day EMA, intersecting at 161.58.
  • EURUSD printed a 1.0453 low overnight, however, notable expiries between 1.0500-1.0600 have helped the pair gravitate 0.25% higher on the session.
  • GBP/USD traded to a new intraday low just ahead of the London close - placing the pair through the Dec02 low. 1.2563 is moderate support ahead of the bear trigger at 1.2487 - below which the underlying primary downtrend resumes. Momentum remains pointed lower, evident in the imminent formation of a death cross (50-dma < 200-dma) for GBP/USD in the coming sessions, the first since October last year - and only the third since the onset of the COVID pandemic in 2020.
  • GBP weakness today comes on the back of the poor monthly UK GDP read this morning, but is more likely underpinned by strong demand for EUR/GBP off the lows, which re-entered an area of strong demand on this week's break lower - finding decent support as a result and rising back above 0.83 ahead of the weekend close.
  • EURCHF is now ~100 pips above pre-SNB announcement levels, gathering momentum above the 50-day exponential moving average on Friday, placing the cross at its highest level in four weeks. A weekly close above this average would signal scope for a stronger recovery, targeting the early November highs at 0.9447 initially, before the 0.9500 handle.
  • Focus next week will be on the central bank slate, with the FOMC and BOJ rate decisions. Eurozone flash PMIs are a notable data highlight.
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  • Higher core yields have further weighed on the Japanese Yen on Friday, boosting the latest USDJPY recovery comfortably back above 153.50, to the highest level since November 26. In similar vein, outperformance for the single currency has prompted a sharp 1% rally for EURJPY, with the cross briefly reaching initial resistance at the 50-day EMA, intersecting at 161.58.
  • EURUSD printed a 1.0453 low overnight, however, notable expiries between 1.0500-1.0600 have helped the pair gravitate 0.25% higher on the session.
  • GBP/USD traded to a new intraday low just ahead of the London close - placing the pair through the Dec02 low. 1.2563 is moderate support ahead of the bear trigger at 1.2487 - below which the underlying primary downtrend resumes. Momentum remains pointed lower, evident in the imminent formation of a death cross (50-dma < 200-dma) for GBP/USD in the coming sessions, the first since October last year - and only the third since the onset of the COVID pandemic in 2020.
  • GBP weakness today comes on the back of the poor monthly UK GDP read this morning, but is more likely underpinned by strong demand for EUR/GBP off the lows, which re-entered an area of strong demand on this week's break lower - finding decent support as a result and rising back above 0.83 ahead of the weekend close.
  • EURCHF is now ~100 pips above pre-SNB announcement levels, gathering momentum above the 50-day exponential moving average on Friday, placing the cross at its highest level in four weeks. A weekly close above this average would signal scope for a stronger recovery, targeting the early November highs at 0.9447 initially, before the 0.9500 handle.
  • Focus next week will be on the central bank slate, with the FOMC and BOJ rate decisions. Eurozone flash PMIs are a notable data highlight.