EUR/JPY Down but Not Out, 124.00 Still in Sight
The EUR/JPY pair's reversal from two week-high gained momentum and has now dragged the pair to the mid-point of 124.00-123.00 handle.
On Wednesday, global risk-off sentiment boosted the safe-haven appeal of the Japanese currency, strengthening JPY across the board. On Monday and on Tuesday, the pair had gained traction on comments from Japan's finance minister Taro Aso that the ministry is prepared to intervene should the Yen starts appreciating again and to curb access volatility. The pair, however, lost momentum on Wednesday on the back of fresh bout weakness across global financial markets.
The pair is reversing from a short-term ascending trend-line resistance extending from late April and hence a subsequent weakness below 123.50 is likely to trigger a fresh leg of weakness for the pair.
Technical levels to watch
Below 123.50 level, the pair seems to immediate drop towards 123.00 round figure mark, which if broken would bring recent multi-month lows support near 121.70-65 area back into the picture.
Meanwhile on the upside, the pair need to build on to its momentum above 124.00 handle in order to increase the prospects of further up-move in the near-term. On a sustained move back above 124.00 level, the pair seems to clear day's peak resistance near two-week high resistance near 124.40-45 area and head towards testing 50-day SMA resistance near 124.80.