EUR/JPY stays bid above 120.00, risk appetite improves

• EUR/JPY remains firm and retakes 120.00 and above on Wednesday.
• Risk-on mood has returned to the markets after Tuesday’s sell-off.
• ECB’s C.Lagarde speaks in Germany later in the session.

The broad-based better tone in the risk complex is lifting EUR/JPY to fresh lows above the key 120.00 mark on Wednesday.

EUR/JPY up on risk-on sentiment

EUR/JPY has managed to regain some poise following Tuesday’s deep pullback to the 119.40 region, all against the recovery in the riskier assets despite coronavirus concerns remain unabated.

Furthermore, news that Germany could pump in some fiscal stimulus have revitalized the interest for the single currency and collaborated further with pair’s daily upside. Indeed, the German Finance Minister could suspend the debt break temporarily to aid local governments.

In the docket, ECB’s President C.Lagarde speaks in Germany later in the session. Across the pond, US housing data are due followed by the EIA’s weekly report.

EUR/JPY relevant levels

At the moment the cross is gaining 0.20% at 120.14 and faces the next up barrier at 120.65 (100-day SMA) followed by 121.39 (weekly high Feb.20) and then 122.65 (monthly high Dec.13). On the downside, a drop below 119.41 (weekly low Feb.25) would expose 118.46 (2020 low Feb.18) and finally 117.07 (monthly low Oct.7 2019) and finally 115.86 (2019 low Sep.3).