Trying To Extend Gains

EUR/JPY rallied yesterday, but the psychological Y125.00 barrier kept a lid on gains. Hopes for progress in U.S. fiscal talks applied some pressure to safe havens, with JPY likely taking a further hit from Gotobi day flows & EUR benefitting from broader USD weakness, even as the coronavirus situation across Europe remained dire, while talks between the EU & UK remained in disarray.

• The rate has added a handful of pips already early on, but has trimmed those gains and last deals +2 pips at Y124.74, still operating within touching distance from yesterday's peak.
• A clean break above the nearest round figure (Y125.00) would clear the way to Oct 9 high of Y125.09, the key near-term support. Gains past that level would signal that bulls have taken initiative. On the downside, the initial bearish target is provided by Y123.02, which represents the low of Oct 15 & 76.4% retracement of the Sep 28 - Oct 9 rally. A breach of Y123.02 would turn bearish focus to Sep 28 low of Y122.38.
• ECB speak headlines in the Eurozone today, with Pres Lagarde, Vice Pres de Guindos & Chief Economist Lane due to appear.