EUR/JPY runs out of steam around 123.00

• EUR/JPY’s upside momentum loses the grip ahead of 123.00.
• EU Leaders clinched deal on recovery fund worth €750 billion.
• Markets’ attention remains on the pandemic vs. recovery theme.

The neutral/bearish note around the singl currency has prompted some cautiousness in EUR/JPY in the boundaries of the 123.00 neighbourhood on turnaround Tuesday.

EUR/JPY targets the 2020 peaks above 124.00

After bottoming out in the 119.30 region on June 22, EUR/JPY has sparked a sharp correction higher, advancing in four out of the last five weeks and re-shifting its focus to the YTD highs beyond 124.00 the figure (June 5).

The relentless upside has been fuelled by the strong improvement in the risk-associated universe, as market participants continue to gauge the progress in the economic recovery vs. the unremitting advance of the coronavirus pandemic. However, latest news citing scientists appear to be closer to develop a COVID-19 vaccine have also collaborated with the upbeat mood among traders.

Nothing worth mentioning data-wise on Thursday, while investors continue to digest the recent deal between EU leaders on a recovery fund worth €750 billion (€390 billion grants and €360 billion in loans).

EUR/JPY relevant levels

At the moment the cross is retreating 0.03% at 122.73 and a drop below 121.14 (monthly high Mar.25) would expose 119.85 (200-day SMA) and then 119.31 (monthly low Jun.22). On the upside, the next up barrier is located at 123.02 (monthly high Dec.13 2019) seconded by 124.43 (2020 high Jun.5) and finally 126.80 (monthly high Apr.17 2019).