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Unless EUR/JPY reverses strongly under Ichimoku cloud support of 127.53, Fibonacci-driven targets at 132.06 and 134.42 remain visible; but economists at DBS Bank expect overbought readings to come into play.

EUR/JPY is mapping out a retracement

“The cross is also at the inflexion point of meeting the 200-month moving average of 130.33, and the technical indicator is slowly moving to reflect an increasingly overbought reading.”

“The upside advance is fuelled by a bullish inverse head-and-shoulders price set up. We focus on the price development within the rectangle; the build-up higher remains sturdy unless EUR/JPY crashes under the Ichimoku cloud support of 127.53.  

“EUR/JPY has so far managed a 130.67 high; further strength eyes 131.27 next, which can light up the tunnel towards the key Fibonacci markers of 132.06 and 134.42.”