EUR/JPY clings to daily gains above 123.00 ahead of FOMC

• EUR/JPY resumes the upside following Tuesday’s moderate pullback.
• Decent support lies in the 122.90 region so far.
• The main event on Wednesday will be the FOMC meeting.

In spite of charting an outside bearish day on Tuesday, EUR/JPY has resumed the upside and advances to the 123.30/40 band on Wednesday.

EUR/JPY now looks to FOMC, risk trends

EUR/JPY is trading within a choppy range so far this week, meeting quite decent support in the 123.00 neighbourhood, while a surpass of the 124.00 mark still remains elusive.

Following last week’s peaks beyond the 124.00 mark, the cross has embarked on a move lower that remains so far underpinned by the 122.90 area, where sits the January’s high.

Alternating risk appetite trends continue to keep the dollar under pressure, favouring at the same time the demand for the Japanese safe haven and therefore capping occasional bullish attempts.

Later in the NA session, all eyes will be upon the FOMC event, where the Committee is expected to strengthen its forward guidance without acting on rates. Further attention is forecasted to be on the probability of the implementation of yield curve control (YCC) at some point in the next months.

EUR/JPY relevant levels

At the moment the cross is gaining 0.02% at 123.12 and faces the next hurdle at 124.43 (2020 high Jun.5) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1). On the flip side, a drop below 122.87 (monthly high Jan.16) would expose 121.14 (monthly high Mar.25) and then 119.95 (200-day SMA).