EUR/JPY Price Analysis: Potential consolidation ahead of extra gains

• EUR/JPY adds to Friday’s losses below the 129.00 level.
• Monthly lows in the 128.20 area should provide initial support.

EUR/JPY keeps correcting lower following last week’s rejection from the 129.60 region, or monthly highs.

The firmer note around the greenback weighs on the single currency and motivates EUR/JPY to correct lower to the sub-129.00 zone despite the persistent selling pressure in the Japanese yen at the beginning of the week.

In spite of the move lower, bulls still appear in control and keep targeting the 2021 highs just below 130.00 (February 25). Further north of this area comes in 130.14 (November 7 2018) ahead of the summer 2018 high at 131.98 (July 17).

Reinforcing the idea of extra gains, EUR/JPY keeps trading above the immediate support line (off November 19 2020 low) in the 127.00 neighbourhood, where also converges the 50-day SMA.

In the meantime, while above the 200-day SMA at 124.56 the broader outlook for the cross should remain constructive.

EUR/JPY daily chart