EUR/JPY 123.00-124.00 Trading Range Holds, Drops to the Lower End
Holding its 5-day trading range, the EUR/JPY pair reversed after testing 124.00 handle on Friday and has now dropped back to the vicinity of 123.00 mark.
The Yen's relative out-performance against the shared currency on Monday
is on the back of risk-off mood, which seems to boost the safe-haven
appeal of the Japanese currency. Further, higher than expected Japan's
trade surplus data seems to further pull the pair lower.
Going forward, the flash version of the Euro-zone PMI reading, due for
release during the European session, would provide some tradable moves
and could also act as an catalyst to trigger a break-out from the pair's
recent trading range. Meanwhile, risk sentiment surrounding European
equity might also drive investor sentiment around the pair.
From technical perspective, the pair remains struck between
123.00-124.00 short-term trading-range. However, looking at the broader
picture, repeatedly failures to sustain its recovery move beyond 124.00
mark points to a near-term consolidation phase before the pair resumes
its prior downward trajectory.
Technical levels to watch
From current levels, the pair seems to be headed back towards testing
the lower end of the trading range support near 122.85-80 area. A
convincing break below the lower end of the trading range seems to open
room for an immediately fall towards recent lows support near 121.65-60
area.
On the flip side, the pair needs to decisively break through the top-end
of the trading range resistance near 124.15-20 area, which if conquered
seems to assist the pair beyond 125.00 psychological mark, towards
125.30-35 horizontal resistance.