EUR/JPY gained momentum after the beginning of the American session and rebounded from 122.90. The pair climbed above 123.50 and broke the 123.65 resistance (May 4 & 5 high). It peaked at 123.92, hitting the strongest level since November.
The euro remains near the highs holding a strong bullish tone, extending the rally that started back on April 17. Since then it has risen constantly, gaining almost 900 pips.
Holding above key levels
Yesterday the pair confirmed the break of the 123.00/50 area, an important technical area that capped the upside during December and January. Today it pulled back below that area after the release in the US of the employment report, but quickly bounced back above.
The recent rally toward 124.00 took place as EUR/USD tested the 1.1000 handle and also amid a recovery of the USD/JPY back above 112.50. If the euro breaks on top of 1.1000 against the US dollar, EUR/JPY could receive an impulse.
To the downside, immediate support might lie at 123.65 (May 4 high), 123.20 and 122.90 (daily low). On the opposite direction, the immediate resistance is the 124.00 handle, followed by 124.10/15 (Dec 15 high) and 124.40/45 (May 10 & 11 2016 high).