EUR/JPY challenges 3-week highs above 121.00

• EUR/JPY moves to weekly tops above the 121.00 mark.
• Increasing JPY selling keeps fuelling the upside in the cross.
• The yen remains under pressure on recession rumours.

After breaking above the key barrier at 121.00 the figure, EUR/JPY seems to have met some selling orders and is has now receded to the 120.80 region ahead of the opening bell in Wall St. on Thursday.

EUR/JPY stronger on JPY-sell off

EUR/JPY has been gathering unusual upside traction in past hours on the back of a sudden change of heart from investors around the Japanese (ex?) safe haven.

In fact, rumours that the Japanese economy could slip back into recession in the short-term horizon has exacerbated the downside pressure in the yen, sponsoring the sharp rebound in the cross from yearly lows in the mid-118.00s (February 18^th).

The cross, in the meantime, has managed to leave behind the critical resistance at the 200-day SMA in the 120.40 region, shifting the near-term outlook on the cross to constructive at the same time.

In the docket, German Producer Prices (finally) surprised to the upside during January, while the GfK’s Consumer Climate gauge matched estimates at 9.8 for the month of March.

Later in the session, the Philly Fed manufacturing index will be in centre stage seconded in relevance by the usual weekly Initial Claims, all in the US calendar.

EUR/JPY relevant levels

At the moment the cross is gaining 0.42% at 120.41 and faces the next barrier at 121.09 (weekly high Feb.20) followed by 121.15 (monthly high Feb.5) and then 122.87 (2020 high Jan.16). On the other hand, a drop below 118.46 (2020 low Feb.18) would expose 117.07 (monthly low Oct.7 2019) and finally 115.86 (2019 low Sep.3).