EUR/JPY: worst day in three weeks, still above key level

• EUR/JPY corrects from highest since Oct 2015. 
• Yen outperforms while euro hits weekly lows against it European rivals. 

The euro dropped more than 50 pips against the yen on Monday. It retreat after hitting last week the highest level in two years. 

EUR/JPY weakened during the European session after being unable to hold on top of 136.00. It continued to decline and bottomed in Wall Street at 135.11, the lowest level since last Thursday. Then bounced to the upside but it was capped below 135.50. Near the end of the day it was hovering around 135.30. 

It is the second decline in-a-row as it continued to retreat after hitting on Friday at 136.62, the highest since October 2015. Despite the correction the main bullish trend appears to be intact. The slide took placed despite positive Eurozone economic data released today, including a higher than-expected rise in November retail sales.

Technical levels 

The bullish tone in EUR/JPY is likely to remain in place as long as it holds on top of the key 134.50/60 area. While above, the pair could attempt a rise toward 140.11 according to Karen Jones, Analyst at Commerzbank. 

“While above the 2017-18 support line at 132.91 an upside bias persists. Below here should be enough to re-target the 131.16 November low. Only a close below the 131.16 recent low would negate the up move and suggest losses to 128.50 and the 127.57 August low”, added Jones.