Forex: EUR/JPY surrounds 128.00 after EMU confidence report

FXstreet.com (Barcelona) - With improved sentiment pushing the EUR higher, the EUR/JPY jumped to 128.32 high on the European opening and is now holding around the 128.00 mark (+0.16% on the day) after the release of the EMU confidence report.

Consumer confidence improved from -23.5 to -22.3, as expected, but economic sentiment indicator (from 90.0 to 88.6), business climate (from -0.75 to -0.93), industrial confidence (from -12.3 to -13.8) and services sentiment (from -7 to -11.1) all fell and disappointed market consensus of 89.3, -0.89, -13.5, and -7.0, respectively.

Portuguese consumer confidence rose from -55.3 to -54.2, and business confidence rose from -3.9 to -3.6. Italian business confidence eased from 88.6 to 87.6, below 88.9 consensus. Italian wage inflation remained unchanged at 0.0% (MoM) and 1.4% (YoY). The Greek PPI dropped from 0.8% to -1.5% in March.

“The risk has increased that we will see a deeper retracement towards the 122.10 5 month uptrend. Intraday rallies should now remain capped by the 128.90/130.00 for the market to remain directly offered”, wrote Commerzbank analyst Karen Jones.