EUR/JPY soars to four-month highs near 121.65

• EUR/JPY continues to rally as Yen tumbles on risk appetite.
• Euro gains 3.55% over the last five trading days versus yen.

The EUR/JPY pair resumed the upside on Tuesday and it accelerated, rising more than 150 pips to 121.62, the highest level since January 23. As of writing, it trades at 121.30/35, consolidating most of today’s gains.

From April’s low, EUR/JPY rose 700 pips. From a week ago, it is up more than 300 pips, supported by the improvement in risk sentiment across financial markets that boosted USD/JPY and EUR/JPY at the same time.

During Tuesday’s American session, EUR/USD stabilized after being unable to break above 1.1200 but USD/JPY kept rising supported also by technical factors, boosting further EUR/JPY. 

No fear from overbought readings

Despite the impressive rally, the EUR/JPY continues to rise. It broke on Tuesday above the 121.00 barrier and tested the next resistance that stands at 121.60. If it consolidates above, the next target is 122.00.

A pullback to 121.00 should not be ruled out. If the euro remains above, the bullish trends will remain intact. Below 121.00 the next support levels might lie at 120.15 and 119.75.