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  • EUR/JPY corrects lower from recent 2021 peaks near 133.50.
  • Further downside should see contention in the 131.00 area.

EUR/JPY recedes further following Wednesday’s new YTD tops in the 133.50 region.

While the ongoing knee-jerk is seen as corrective only, it is expected to meet initial support in the 131.00 neighbourhood, or May lows. A breach of this area carries the potential to extend the leg lower to the 130.70 zone, where converge the 50-day SMA and the immediate support line (off the March’s low). This area should hold the downside and prompt some reversion.

In the broader picture, while above the 200-day SMA at 126.80 the broader outlook for the cross should remain constructive.

EUR/JPY daily chart

 

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