EUR/JPY clings to gains above 124.00

• Euro holds onto daily gains versus the US dollar and yen.
• EUR/JPY makes strong rebound, rises back above the 20-day moving average.

The EUR/JPY extended gain during the American session and prince a fresh six-day high at 124.33. It is consolidating gains, having the best performance in almost a month.

The rally in EUR/USD and the stabilization of USD/JPY is boosting the EUR/JPY on Monday. Over the last hours, equity prices turned negative, but the cross held onto gains. The fading risk appetite did not help the yen so far. Actually, USD/JPY is rising toward daily highs.

The US dollar remains weak across the board, and EUR/USD is trading at fresh daily highs near 1.1800. The pair has risen almost a hundred pips from Asian session lows, supporting gain in EUR/JPY.

Brexit headlines did not impact on markets. Michel Barnier, chief EU negotiations, confirmed the block remains available to talks in London this week. European Central Bank President Lagarde’s comments also were ignored by market participants. She mentioned the central bank will continue to implement an accommodative monetary policy stance in response to the pandemic.

Levels to watch

The EUR/JPY rebounded from the 100-day moving average that is offering support at 123.45. A daily close below that line would suggest more weakness ahead. The short-term momentum is starting to favor the upside, with the price back above the 20-day moving average (123.80) and turning north. The next strong resistance is seen at 124.50.