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Forex: EUR/JPY heaviness stays; watch 121.60/85 supply

FXstreet.com (Barcelona) - EUR/JPY remains stagnant through a holiday twin-light Asian session, with the pair ranging between 120.60 and 120.80. From a short term perspective, the market seems to still like the idea of selling into supply areas through lower timeframes, as seen since mid February following a second rejection off 125.00 weekly supply-sensitive zone.

Looking north, the key area where opportunities to reinstate short positions may arise is found at 121.60/85, with the downside showing some pivot point lows at 119.80 or 118.80, but nothing alarming until significant demand is faced at 118.00, as per the start of Jan 24 rally. While latter level may stall future falls, should be noted that the area is no longer fresh rather a retest from first demand created through the Jan 16 initial base, suggesting part of the bids potentially lying there may have been eaten out.

According to Valeria Bednarik, chief analyst at FXstreet.com: "The downside continues to be favored both short and midterm. In the hourly chart, price remains below 100 SMA currently offering dynamic resistance around 120.80, while indicators remain in neutral territory; once below 120.40, further slides are to be expected today.

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