• EUR bulls rescued by the latest Italian political development.
• Fading safe-haven demand provides an additional boost.
The EUR/JPY cross maintained its strong bid tone through the early European session, with bulls now looking to extend the momentum further beyond the 131.00 handle.
The cross built on this week’s goodish rebound from closer to mid-129.00s and continued gaining positive traction for the second consecutive session on Friday. The latest political development in Italy, wherein the 5-Star and League leaders reached a final agreement on government programme, provided a much need respite for the shared currency.
This coupled with an offered tone surrounding the Japanese Yen, further aggravated by disappointing Japanese Core CPI print and fading safe-haven demand, remained supportive of the pair’s continuous climb on the last trading day of the week.
In absence of any major market moving economic releases, the cross might now aim towards ending on a positive note and post second consecutive weekly gains, moving farther away from last week’s 1-1/2 month lows near the 129.25-30 region.
Technical levels to watch
Immediate resistance is pegged near weekly tops, around the 131.35-40 region, above which the recovery move could further get extended towards the 132.00 handle en-route the very important 200-day SMA, currently near the 132.35 region.
On the flip side, 130.75 level now seems to act as an immediate support, which if broken might turn the cross vulnerable to head towards retesting the key 130.00 psychological mark before eventually dropping back to 129.40-30 support area.