- EUR / JPY extends lateral rallies around 134.00.
- The focus is on the potential drop due to overbought conditions.
EUR / JPY appears to be consolidating at the upper bound of the recent range near the 134.00 zone.
The continuation of the ongoing consolidation, or some bearish movements, should not be ruled out, considering the current overbought conditions of the cross.
However, the buying bias remains unchanged and could motivate the EUR / JPY to attempt a visit to the September / October 2017 highs at the 134.40 / 50 band, should it break the recent highs in the short term. Further rallies are likely as long as the cross remains buttressed by the immediate support line (from March lows) near 131.40. This zone is also reinforced by the proximity of the 50-day SMA (131.46).
In the bigger picture, as long as it remains above the 200 SMA today at 127.19, the overall outlook for the crossover should remain constructive.
EUR / JPY day chart
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