EUR/JPY en route to 139.00 amid higher stocks and weaker Yen

• The ECB might start hiking in mid-2019.
• The EUR/JPY is up 160 pips so far on Monday.

The EUR/JPY is currently trading at around 130.80 up 1.09% on the day so far as earlier in the European session as Bundesbank president and the ECB Governing Council member Jen Weidmann made a comment in which he said that hiking interest rates in mid-2019 might be in the cards.

The JPY is getting relatively weaker as US equities are up on Monday so far after last week saw the Japanse Yen rise while stocks went down across the board on fears of a global trade war. 

No major macro announcement is scheduled on Monday in the Eurozone and Japan. Second tier Japanese data is scheduled later in the day at 23.50 GMT with Corporate Service Price in January expected at 0.7%.

EUR/JPY weekly chart

The EUR/JPY is trying to find support at both the 50 and 200-period simple moving average with bulls trying to form a wedge bull flag. The 123.50 level is the key level that bulls will to break above as it was the cyclical high made three weeks earlier. The next resistance is seen at the 135.00 figure which was a previous supply level. On the flip side, support is seen at 129.00 which is the low of last week and if the bears manage to break through the support the next key support is seen at the 125.00 level which is a previous demand level and close to the 100-period simple moving average. 

EUR/JPY daily chart

The bulls are lifting the market from last Friday’s low made at 129.00. The first resistance to overcome for them is the 131.00 figure which is a previous supply/demand zone; after which 132.00 should become the next resistance as it the last cyclical high. Support is seen at 129.00, last week’s low and then at 128.00 former demand level.