EUR/JPY: technicals are neutral between 122.60 and 125.80

Currently, EUR/JPY is trading at 122.82, down -0.53% on the day, having posted a daily high at 123.76 and low at 122.81.

EUR/JPY has moved lower in broad yen and dollar strength. The move has taken the cross down to test a previous double bottom area between 122.62/80. Markets are awaiting fresh data and central banks this week with one eye on politics, and investors are n the sidelines supporting the offer in the cross. 

We have the FOMC statement this week and the Bank of Japan meets. "There seems to be increased interest in the Diet and media about the exit strategy. The message from the Bank of Japan is patience.  It is too early to have a meaningful discussion," explained analysts at Brown Brothers Harriman, adding, "Although some measures deflation has abated, the Q1 GDP deflator, which some economists argue is a more accurate measure of prices, was minus 0.8%."

EUR/JPY levels

EUR/JPY stalled the recent uptrend at 125.80 on May 16 and Selena Nicholas at X argued that the short-term bias is neutral. "The market is trapped between 122.60 and 125.80 but the pause in the uptrend could be temporary as the 50-day and 200-day moving averages are positively aligned and the market is above the daily Ichimoku cloud. Only a move below 120.60 would reverse the recent uptrend that has been in place since the rise from the 115 area," Nicholas explained.