EUR/JPY gained momentum during the last hours amid a decline of the Japanese yen. The pair broke above 125.250 and climbed to 125.40, reaching the highest level since May 16. The pair currently is trading at 125.25, marginally higher for the day and close to daily highs.
The pair continues to move whit a bullish bias but the upside remains limited. The pair has only risen one pip above yesterday’s highs and less than ten pips on top of Monday’s highs.
The recent move took place amid a slide of the yen as equity prices in Wall Street extended gains. The Dow Jones is now up 0.13% and the Nasdaq gains 0.15%.
Levels to watch
EUR/JPY has fully recovered from the spike lower of last week, when it dropped from multi-month highs slightly below 126.00 to 122.55. From those lows, it has risen more than 300 pips and is back near the 126.00 key area.
The relevant immediate support could be seen around 124.90, the 20-SMA in the 4-hour chart, a decline below would weaken the pair. The next support could lie at 124.05/10 (May 22 low).
To the upside the area around 125.50 is the first resistance, followed then by last week high at 125.85 and then the 126.00 handle.
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