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  • EUR/JPY rebounds after bottoming out near 126.00.
  • Further losses expected to test the 125.60 area.

Sellers have so far failed to drag EUR/JPY further south of the 126.00 neighbourhood this week. The ongoing bounce is seen as corrective only and could be part of a broader 126.00-127.50 range. If the 126.00 level is cleared, then there is. Chance of a deeper move to the 125.60 region (January 27).

There is no change on the topside, where the 2021 highs around 127.50 remain the next hurdle of significance. If this area is cleared, then there are no barriers of note until the November 2018 tops in the 130.10/15 band.

Looking at the broader picture, while above the 200-day SMA at 123.38 the outlook for the cross should remain constructive.

EUR/JPY daily chart