EUR/JPY jumps to weekly highs near 137.90 after NFP

• US Payrolls rise above expectations in July.
• Japanese yen drops sharply as US yields soar.
• EUR/JPY rebound more than 400 pips from the weekly lows.

The EUR/JPY jumped following the release of a better-than-expected US employment report. The cross rose to 137.75, reaching the highest level in a week. It is hovering around 137.50, holding onto strong daily gains.

From the weekly low EUR/JPY has gained more than 400 pips. The sharp rebound weakened the negative outlook for the pair. On the upside, the next key resistance is at 137.90, the 20-week Simple Moving Average. A weekly close above that level should open the doors to more gains.

On Friday, EUR/JPY is rising for the fourth consecutive day boosted after the release of US employment data. Non-farm payrolls rose by 528K above the 250K expected. The numbers triggered a decline in Treasuries that weighed on the yen.

The Japanese currency tumbled across the board even as equity prices in Wall Street declined hit by higher US yields. The US 10-year yield rose from 2.70% to 2.84%.

EUR/JPY’s rally on Friday is being driven by a weaker yen. EUR/USD tumbled following NFP, falling from 1.0220 to levels under 1.0150. At the same time, USD/JPY jumped from 133.20 to 135.35.

Technical levels