EUR/JPY clears the 131.00 handle as risk appetite surges

• The Euro catches a ride on risk appetite, Yen recedes against the major currency bloc.
• A lack of macro data leaves the pair exposed to possible swings in risk sentiment.

The EUR/JPY heads into the overnight session on the high side, testing 131.23 after climbing steadily in Monday's trading.

Risk appetite is back on in markets, and the Yen is receding across the board as fears of trade wars begin to recede. With the macro calendar quiet for both currencies on Tuesday, the only event of note will be the European Business Climate survey, due at 09:00 GMT. Economic activity and growth have slowed somewhat in the European Union for the first quarter of 2018, and the Business Climate indicator for March is expected to print at 1.40, compared to the previous reading of 1.48.

With trade tensions easing back this week and Brexit concerns also shuffling to the back burner, market liquidity is pouring back into risk assets like the Euro, and the Yen is loosening its grip as traders back away from the safe haven. However, with the economic calendar a thin showing this week, risk-souring headlines could knock risk aversion back into the foreground quickly.

EUR/JPY Technicals

The pair has bounced on Monday's risk appetite, but the pair is still trading deeply in bearish territory, below the 200-day SMA at 132.50 and the 50-day EMA providing declining resistance from 131.80. Support to bolster a bearish turnaround from here will be seen at the 50.0 Fibo level at 130.15, while the floor is priced in near the 129.00 major level at last week's low.