EUR/JPY pushes higher beyond 126.00, daily highs

• EUR/JPY looks firm and extends the upside above 126.00.
• The soft note in the dollar, yen fuels the strong rebound.
• German flash CPI coming up next in the euro calendar.

The continuation of the downside momentum around both the Japanese yen and the greenback is helping EUR/JPY to reclaim the area above 126.00 the figure at the beginning of the week.

EUR/JPY stronger on risk-on mood

While the greenback keeps melting, EUR/JPY continues its march north on quite a firm footing, managing to reclaim the 126.00 mark and beyond amidst a strong bias towards the risk-associated universe.

In fact, the selling pressure around the dollar has intensified following the Jackson Hole event and after Chief Powell introduced the Average Inflation Targeting, a view that has been perceived as the continuation of the “lower for longer” stance of the Federal Reserve.

Later in the session, the most salient event will be the release of August’s advanced inflation figures tracked by the CPI in Germany. In the US calendar, speeches by FOMC’s Clarida and Bostic are only due along with the Dallas Fed manufacturing index.

News around the Japanese safe haven says S.Abe's righ-hand man Y.Suga is the front-runner to replace him following his decision to step down (Friday) due to health reasons.

EUR/JPY relevant levels

At the moment the cross is gaining 0.84% at 126.46 and faces the next hurdle at 126.75 (2020 high Aug.13) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1). On the opposite side, a drop below 124.44 (weekly low Aug.21) would expose 124.28 (weekly low Aug.11) and finally 122.87 (monthly high Jan.16).