- EUR / JPY is struggling to come back above 130.00 after pulling back from the 130.45 high.
- The euro does not take advantage of the weakness of the Japanese yen.
- The pair should break 130.45 to increase the bullish momentum.
The reversal of EUR/JPY From the three-week highs at the 130.45 zone seen earlier on Wednesday it has found support at 129.65 although, so far, the pair seems unable to extend its bounce beyond the 130.00 level.
The euro remains limited below the 130.50 zone
The common currency has been rejected from the middle of the range at 130.00 where it has already failed several times over the past two months. The EUR / JPY peaked at 130.45 this time and is expected to post its first daily reversal after having risen around 1.75% for the past five sessions.
The euro was unable to take advantage of the weakness of the Japanese yen, which is seeing a steady decline against the US dollar. Furthermore, improving risk sentiment, with major European and US stock indices posting strong gains, should favor the euro versus the safe-haven yen.
EUR / JPY should break above 130.65 to improve its short-term bias
Technical indicators show that the pair is losing bullish momentum on the hourly charts. The pair should return above 130.00 and break the 130.45 resistance to improve its short-term bias before testing the September high at 130.75.
On the downside, the pair remains supported above the 100-day SMA at 129.75 so far. A clear break from that level would send the pair towards 129.40 (September 24 low) and 128.75 (September 22 high).
Technical levels
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