EUR/JPY ends four-day negative streak, rising more than a hundred pips

• EUR/JPY climbs back above 120.00, remains under 20-day SMA.
• Rally supported by a recovery in Wall Street and EUR/USD gains.

The EUR/JPY pair rose from a fresh three-week low at 119.30 back above 120.00. It peaked during the American session at 120.42, the strongest since Thursday. Over the last hours, it has been hovering around 120.30/40, holding onto strong daily gains and rising after falling during the previous four trading days.

The move higher took place amid higher equity prices in Wall Street and supported by a rally in EUR/USD while USD/JPY held steady, flat around 106.85.

From a technical perspective, Monday’s gains alleviate the bearish pressure and could point to further gains. On the upside, the immediate resistance is seen at 120.50, followed by the critical 20-day moving average at 120.85. A close above 121.00 could sign the bullish correction is over.

The main trend in EUR/JPY in the short-term still point lower but the momentum eased and some consolidation ahead seems likely, particularly if the pair holds above 119.30. On the contrary, a break lower would clear the way to more losses.

Technical levels