EUR/JPY: Better bid on reports of US/China dialogue

• Risk mood improves somewhat on reports of US/China dialogue.
• EUR/JPY is on the rise, may see positive follow-through to Friday's spinning bottom.

The EUR/JPY is trading on the front foot in Asia, tracking the improvement in the risk sentiment on reports the US and China are negotiating to improve US access to Chinese markets.

The S&P 500 futures are up 10 points or 0.38 percent, indicating a relief rally could be in the offing. Consequently, the Japanese Yen is being offered across the board.

The data calendar is light with just the German import price index (Feb), scheduled for release at 06:00 GMT. Meanwhile, Bank of Japan (BOJ) governor Kuroda will speak in the parliament later today. The FX markets will focus on whether the US and/or China will soften or harden their stance on trade.

The relief rally in the risk assets will likely gather traction if the US-China negotiations progress to avoid a trade war.

EUR/JPY Technical Levels

Currently, the pair is trading at a session high of 129.83, having clocked a low of 129.28 earlier today. A clear break above130.00 (5-day MA + psychological hurdle) would expose the descending 10-day MA located at 130.54. A close higher would signal a bottom is in place and may yield a rally to 131.73 (Mar. 20 high).

On the downside, breach of support at 129.61 (March 19 low) could yield a sell-off to 129.28 (session low) and 128.94 (previous day's low).