EUR/JPY Price Analysis: Bulls challenge multi-week trading range hurdle, around 126.70

The EUR/JPY cross gained strong positive traction on Monday and climbed to one-week tops, around the 126.75 region during the mid-European session. The mentioned area marks the top end of a near four-week-old trading range, which if cleared decisively will mark a near-term bullish breakout.

Meanwhile, technical indicators on the daily chart maintained their bullish bias and have again started gaining positive traction on hourly charts. The set-up remains tilted firmly in favour of bullish traders and supports prospects for an eventual breakout through the mentioned range.

That said, relatively thin liquidity conditions warrant some caution for aggressive bullish traders. This makes it prudent to wait for some follow-through buying, possibly beyond last week's swing high, around the 127.00 mark, before positioning for any further near-term appreciating move.

The EUR/JPY cross might then accelerate the positive momentum towards testing the next major hurdle near the 127.40 region, above which bulls are likely to aim back towards reclaiming the 128.00 mark.

On the flip side, immediate support is pegged near the 126.25 horizontal support and is closely followed by the 126.00 mark and the trading range support, around the 125.80 region. Sustained weakness below the mentioned support levels will negate prospects for any further near-term gains.

EUR/JPY 4-hourly chart

Technical levels to watch