EUR/JPY rejected from above 134.00, retreats toward Friday’s close

• Spot lost momentum after approaching 2017 highs. 
• Remains in a wide range, near critical resistance. 

The EUR/JPY pair opened the week with a positive tone and reached levels on top of 134.00 but it was rejected and pulled back as EUR/USD dropped and after USD/JPY failed to break above 113.00. 

Range prevails 

EUR/JPY just hit a fresh daily low at 133.48, a level still located above Friday’s close. As of writing it trades at 133.55/60, holding negative intraday tone. 

The euro is retreating after being unable to break the key resistance around 134.30/50 that capped the upside during the previous three months. Since September EUR/JPY has been moving in a range between 134.40 and 131.50. 

Last week the pair hit the highest level in a month but it was unable to consolidate above 134.00 and lost strength. It opened the week with a bullish gap that is being closed. 

Technical levels 

To the upside, the immediate resistance is seen at 134.05, a consolidation on top could lead to a test of the 134.50. If the euro manages to hold above 134.50, it could open the doors to more gains in the medium term. As long as it remains unable to hold on top of 134.20/40, the upside would be seen as limited. 

On the downside, below 133.50 more weakness should be expected with a potential target above the 133.10 support. The next level to watch could be 132.70 (20-day moving average). On a wider perspective, the critical area is seen around 131.30/50: a daily close significantly below would be a very negative technical signal for the euro.