FXstreet.com (London) - Karen Jones, Chief analyst at Commerzbank, explains the risks to the downside for EUR/JPY.

She said EUR/JPY last week rallied to and failed just ahead of the 131.12/30 resistance band (April high, the June 11 high and the top of the daily cloud) as expected. What she said that she didn’t expect was for it to hold over the 20 day ma at 128.44. “As long as 131.30 caps, there is a risk of a slide back to the base of the cloud at 126.47 then 125.00/124.45 band of support (mid-April low and the 23.6% retracement of the entire move up from the July 2012 low).” She explains that this is a key band of support and 124.45 is considered to be the break down point to 118.82/65, the February and April lows and the 38.2% retracement of the same move.