Forex: EUR/JPY adding +500 pips in December, at 112.14 high

FXstreet.com (Barcelona) - The EURJPY was mostly rangebound throughout the Asian session test of the lows at 111.54 on the European opening, the cross entered a rallying phase that sharpened in time, being able to even break above the 112.00 mark. The upside printed a new 2012 high at 112.14. Also, the EURJPY summed +500 pips in December, since 106.98.

This European morning rally is mostly due to euro strength rather then Yen weakness this time. The single currency is being increasingly bid after having breached 1.3173/80 resistance (78.6% retracement of the move seen in 2012 and the September high) on the EURUSD chart. Helping the sentiment was the German IFO survey with overall good news.

German IFO survey's Business Climate and Expectations improved to 102.4 and 97.9, beating consensus. Disappointing was Current Assessment, sliding from 108.1 to 107.1, instead of coming in at 108.0 in December as expected. Just released Construction Output (YoY) in the Eurozone fell from -3.8% to -4.1% in October, also contracting on the month by -1.6%.

UBS analysts are bullish on the EURJPY: "The cross continues to post new recovery highs. The next major resistance is at 114.18 ahead of 115.02", wrote Gareth Barry, pointing to support at 110.35.