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Forex: EUR/JPY, key demand 121.00/122.00 under threat

FXstreet.com (Barcelona) - The EUR/JPY has failed to attract trader's interest 2 hours into the Tokyo session, with the pair consolidating along the 122.50 after the strong rejection off 124.50 supply, which also implied closing the weekend down-gap.

As explained by Valeria Bednarik, chief analyst at FXstreet.com: "A stronger yen lead the EUR/JPY to lose almost 1.5% this Thursday, triggered by a general disappointment over Kuroda’s words early on the day, and USD yields’ slide."

Valeria adds: "The pair enters Asia with the hourly chart showing indicators in extreme oversold levels, and price below 100 and 200 SMA’s. The distance in between MAs keeps widening, which support the bearish bias for the upcoming sessions. With a light calendar in Asia, market will likely follow local shares that will replicate their overseas counterparts, all closed in red."

Sean Lee, founder at FXWW, notes: "Prime broker reports suggest that many of the really big EUR/JPY long positions are getting a bit nervous and large trailing stops are noted, starting just below 121.50 and getting heavier below 121.00. As I said earlier, the 55-day MA should also be worth watching as its been an excellent support point in recent months (currently at 122.10)."

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