EUR/JPY Reclaims 124.00 Handle
Global risk-on sentiment continues to drag JPY lower against most major currencies, with the EUR/JPY pair extending its recovery from 122.00 handle to move back above 124.00 mark.
Monday
rally was triggered on comments from Japan's finance minister Taro Aso,
who made a direct reference to the possibilities of a intervention in
the Forex market should the Japanese Yen starts appreciating again. Aso
stated that the ministry was prepared to curb access volatility and
sharp appreciation of Japanese currency, which has now turned a major
concern for policy makers on declining competitiveness of country's
exports.
The pair has now comfortably trading above its
short-term moving averages (10, 20-day SMAs) but is now close to its
immediate resistance near 124.00-124.15 area, marking 23.6% Fibonacci
retracement level of 132.30-121.68 down-slide. A clear break through
above this immediate resistance opens room for further appreciation for
the pair in the near-term.
Technical levels to watch
Above
124.00 handle resistance, the pair could immediately aim towards
testing 50-day SMA resistance, near 124.75-80 region, which if conquered
has the potential to further boost the pair, beyond 125.00
psychological mark resistance, towards its next major resistance near
125.60-70 area (38.2% Fibonacci retracement level).
On the flip
side, weakness below 123.80-65 horizontal area seems to find support at
day's through level near 123.30-25 region. Slide below intraday lows
could be limited at 122.85 support but any subsequent weakness below
122.85 would negate prospects of any further recovery, dragging the pair
back below 122.00 handle, towards retesting its recent lows support
near 121.70-65 area.
