The EUR/JPY cross extended Friday’s up-move from 100-day SMA support and has now moved to the top end of its 4-day old trading range.
The cross continued gaining traction for the second consecutive day, despite of a mildly negative sentiment surrounding the EUR/USD major. Hence, today’s appreciating move could be solely attributed to an offered tone around the USD/JPY major.
Although the cross has moved back closer to over 1-month highs touched on Wednesday, it still remains to be seen if it is able to break through its recent consolidative phase and build on last week’s strong up-move led by Emmanuel Macron’s (pro-EU) victory in the first round of the French Presidential election.
Against the backdrop of Friday’s upbeat Euro-zone CPI print, which eased concerns raised by the ECB President Mario Draghi during the post meeting press conference on Thursday, a follow through appreciating move, further beyond the 122.00 handle, remains a distinct possibility.
Technical levels to watch
Momentum above the said handle is likely to confront a strong resistance near 122.20-25 region, above which a leg of up-move is likely to lift the cross initially towards 122.50-55 intermediate resistance ahead of March monthly highs resistance near 122.80-85 area.
On the flip side, weakness below mid-121.00s is likely to get extended towards the 121.00 round figure mark. Any further downslide below 121.00 mark is likely to be limited and is likely to find fresh buying interest near 120.65-60 strong support (100-day SMA).